The International Comparative Legal Guide To: Merger Control 2014

1 RELEVANT AUTHORITIES AND LEGISLATION

1.1 Who is/are the relevant merger authority(ies)?

The Autorita Garante della Concorrenza e del Mercato (Italian Competition Authority or "ICA") is an independent administrative body established in 1990 with its seat in Rome. The ICA is also in charge of applying， inter alia, national and European competition law provisions and national legislation concerning consumer protection and unfair commercial practices.

The ICA's contact details are:

Autorita Garante della Concorrenza e del Mercato Piazza G. Verdi, 6/a 00198 Rome, Italy Tel.: +39 06 85 82 11 Fax: +39 06 85 82 12 56 URL: www.agcm.it.

1.2 What is the merger legislation?

Law No. 287 of 10 October 1990 (the "Italian Competition Act") sets forth the rules on merger control (in particular, Sections 5 to 7 and 16 to 19). Presidential Decree No. 217 of 30 April 1998 contains some procedural and enforcement rules applicable to merger control proceedings. The ICA has also issued guidelines as to the application of merger control rules, including the notification forms (unofficial English translations of these documents are available on the ICA's website).

The Monti government introduced significant changes to the Italian merger control rules (Law No. 27/2012). Effective as of 1 January 2013: (i) the bar above which mergers and acquisitions become reportable was raised, eliminating the need for smaller transactions to be notified; and (ii) merger filing fees for reportable transactions were abolished (see questions 2.4 and 3.10 below). As a result, a new financing regime has been introduced in order to cover the ICA budget. As of 1 January 2013, the new regime provides that, regardless of any merger activity, all corporations based in Italy with a total turnover of over €50 million have to pay an annual fee to the ICA amounting to 0.08 per thousand of their turnover in the last financial year (the minimum fee for each company is €4,000 up to a maximum amount of €400,000). For 2014, the ICA has set the annual fee at 0.06 per thousand (ICA Resolution of 9 May 2013, No. 24352).

Section 1(4) of the Italian Competition Act requires the ICA to interpret the national competition rules and merger control in accordance with the principles of EU competition law. In practice, the ICA follows the European Commission's approach on the most significant issues concerning merger control enforcement (with certain exceptions, notably joint ventures - see question 2.3 below). The European Commission's Consolidated Jurisdictional Notice ("EU Jurisdictional Notice") is generally applied by the ICA when assessing national merger cases.

1.3 Is there any other relevant legislation for foreign mergers?

No. However, pursuant to Section 25(2) of the Italian Competition Act, the President of the Council of Ministers may prohibit, for "essential reasons of national economy", an acquisition of an Italian company by a foreign company if, in the country of origin of the prospective purchaser, Italian companies are subject to discrimination, in particular as regards their ability to acquire local companies. This provision is meant to ensure reciprocity between Italy and foreign states. However, it has not been applied to date.

In 2012, the Italian government introduced new "golden share" rules applicable to a broad range of M&A transactions relating to assets in defence and national security, energy, communications and transportation (Law No. 56/2012). These rules grant the Italian government - not the ICA - special powers to veto or condition the purchase of interests in the share capital of, or the implementation of certain extraordinary transactions by, Italian companies that are active in the above-referenced fields. This new legislation sets forth a comprehensive investment control regime in the affected sectors, imposing prior notice to the government and a waiting period (these rules were recently applied for the first time in connection with General Electric's $4.3 billion acquisition of the aviation business of Avio S.p.A., an Italy-based manufacturer of aviation propulsion components and systems for civil and military aircraft).

1.4 Is there any other relevant legislation for mergers in particular sectors?

Yes. There are specific rules applicable to certain sectors as further described below. The ICA's decisions on any merger or agreement concerning the telecoms, broadcasting and media sectors are subject to a mandatory but non-binding opinion of the Italian Communications Authority (Autorita per le Garanzie nelle Comunicazioni), which must be provided within 30 calendar days of transmission of the documentation from the ICA. During this period the deadline for a decision by the ICA is suspended. As a result, the ICA's review period to adopt a phase-one decision is extended to 60 calendar days. Furthermore, a 2006 resolution of the Italian Communications Authority (Resolution No. 646/06/CONS) provides that, in addition to the ICA, reportable transactions involving companies active in the integrated communication system sector in Italy ("SIC" which includes press, TV (paid-for and free), radio broadcasting and other forms of communication) must be filed with the Italian Communications Authority, which will ascertain whether a dominant position in any of the SIC markets could be created as a result of the proposed transaction.

As regards mergers in the insurance sector, the ICA must seek the mandatory but non-binding opinion of IVAAS (Institution for the Supervision of Insurance, an independent authority supervising the insurance sector) before issuing its decision. During this period the deadline for a decision by the ICA is suspended. As a result, the ICA's review period to adopt a phase-one decision is extended to 60 calendar days.

In the banking sector, the Bank of Italy will assess the transaction from a regulatory perspective in parallel to the ICA assessing the competitive effects of the proposed transaction, both having a time limit of 60 calendar days to conduct their respective assessments.

The Monti government introduced in 2011, for the first time in Italy, a statutory provision expressly prohibiting interlocking directorships in the financial industry (Article 36 of Law No. 214/2011). The prohibition applies to holders of a seat in managerial, supervisory and control bodies, as well as officers charged with managerial duties in companies or a group of companies active in the banking, insurance and financial markets that hold, or exercise, similar offices in companies and/or a group of companies active in the same products and geographic markets. The Italian notification forms already provide for a section on interlocking directorships so that merger control rules will be used to ascertain compliance with the new law.

Specific rules on the calculation of the relevant turnover for merger control purposes for banks, financial institutions and insurance companies are provided in Section 16.2 of the Italian Competition Act (see also question 2.4 below).

Under Section 8 of the Italian Competition Act, undertakings entrusted by law with the operation of services of general economic interest or that operate under a statutory monopoly which intend to enter markets outside the scope of their current activities (so-called New Markets), are only permitted to do so through separate companies (corporate unbundling). Incorporation of such separate undertakings or acquisition of controlling interests in existing undertakings active on New Markets requires prior notification to the ICA (a notice regarding the formalities applicable has been published by the ICA), regardless of whether the turnover thresholds are met. Fines up to €51,645 can be imposed for failing to notify.

Transactions involving companies active in the distribution of movies and operation of cinemas are subject, in addition to the ordinary merger control rules, to an alternative set of thresholds. Irrespective of the turnover of the companies concerned, prior notification to the ICA is mandatory for acquisitions leading to the creation of a market share exceeding 25 per cent in one of the main Italian cities.

See question 3.11 below for rules applicable to the acquisition of control over listed companies.

2 TRANSACTIONS CAUGHT BY MERGER CONTROL LEGISLATION

2.1 Which types of transaction are caught - in particular, how is the concept of "control" defined?

The Italian Competition Act applies to transactions that constitute a "concentration" (Section 5) which occurs where:

two or more undertakings merge (two or more undertakings amalgamate into a new undertaking (merger in the strict sense), or one or more undertakings are absorbed by another (merger through incorporation)); undertaking or a physical person already controlling an undertaking acquire direct or indirect control of the whole or parts of one or more undertakings; or two or more undertakings create a joint venture through the establishment of a new company, provided that the joint venture is not of co-operative nature. Control

Given the express general obligation contained in the Italian Competition Act to interpret its provisions in accordance with the relevant EU principles (see question 1.2 above), the notions of "undertaking" and "control" under Italian merger control rules are substantially construed in accordance with the EUMR.

The concept of "undertaking" includes virtually any legal entity having an entrepreneurial, business and/or commercial nature, and Article 7 of the Italian Competition Act contains a wide definition of control for the purposes of the enforcement of merger control rules. In particular, the provision expressly refers to the definition of "controlled companies" as provided by Article 2359 of the Italian Civil Code, namely:

companies in which another company has the ability to control, directly or indirectly, including through fiduciary companies, the majority of votes at the...