SAI-La Fondiaria Merger Approved – On Condition

December 23, 2002

The long running saga of SAI’s takeover of la Fondiaria in an effort to create Italy’s second largest insurance group, may finally be heading for a conclusion, as two key regulatory agencies, the ISVAP, which regulates Italian insurers, and Consob, the country’s stock market watchdog have given it their tentative approvals.

Consob stuck by its earlier ruling, which had allowed SAI and its mentor, the Italian financial services group Mediobanca, to acquire control of La Fondiaria through a merger, rather than a buyout, which would have required that the same offer be made to all shareholders.

The agency did note, however, that there was evidence that the two companies cooperated in gaining control of La Fondiaria, which is rather like finding evidence that birds fly and fish swim, and made the approval conditional on the two companies reducing their combined stake to less than 30 percent by February 18. The ruling also applies to Premafin, SAI’s majority shareholder, which effectively controls 31.3 percent of Fondiaria (28.8 percent being SAI’s stake).

Not unsurprisingly, a group of Fondiaria’s minority shareholders have announced plans to file a lawsuit in an effort to recover damages for the amount they would have received, had regulators required that a full tender offer be made.

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