Former Italian Prime Minister Silvio Berlusconi has offered to use his vast media empire to help make certain that Telecom Italia SpA does not fall into foreign hands. Berlusconi while delivering a speech at a political conference in Florence said, ‘We are ready to buy into Telecom to guarantee its Italian ownership, but we don’t want to control it.’ He also guarded his offer by saying, ‘My offer should be understood as an act of patriotic generosity, and if there are any problems with it, I would back out immediately.’ However, there are high chances that his involvement will only further politicize the heated battle for control of the company.
Berlusconi was quoted saying in political tone, ‘We are available to do our part to defend the Italianness of such an important company, but as part of an action with other investors.’ However, Mediaset Chairman Fedele Confalonieri had already expressed his intention to acquire Telecom Italia saying, Mediaset is obviously interested in Telecom Italia.
Recently, US telecom giant AT&T withdrew from talks citing regulatory uncertainties earlier this week to acquire a stake in Olimpia, the unlisted company that controls Telecom Italia with an 18 percent stake, from Pirelli & C SpA. The departure from talks came in the middle of concern from Rome about the former telephone monopoly falling into foreign hands, triggering conjecture about probable Italian investors stepping forward.
In the meanwhile, the US ambassador in Rome has launched a fierce attack on impediments to foreign investment in Italy, linking the country’s attitude to outsiders to the poor performance of its economy. Ronald Spogli said, ‘barriers were often erected in the way of foreign investors in Italy, noting the country’s relatively low levels of foreign investment’. He further cited that Italy attracted about $20 billion in new foreign investment in 2005, compared with $60 billion for France and $165 billion for the United Kingdom. The US investment in Italy has been recorded just under $26 billion, lagged behind the UK, Germany, France and Spain.
Even for Mediaset there are regulatory hurdles that could prevent it, which already owns three television channels, from acquiring a controlling stake in Telecom Italia, whose media unit controls two TV stations.
