Monte Dei Paschi Acquires 3.1% Stake in Generali

March 14, 2003

Monte Dei Paschi, Italy’s fifth largest bank, has acquired a 3.1 percent stake in Assicurazioni Generali, the country’s largest insurer, for an estimated 798 million Euros ($877 million), based on the insurer’s current share price.

According to a report from Dow Jones Newswires the move is seen as part of an attempt by Italian banks to reduce the influence of Mediobanca, SpA, the investment bank that has exerted behind the scenes control over large sectors of Italy’s economy for many years.

It is Generali’s largest shareholder with a 13.6 percent stake, and is widely believed to exercise an inordinate amount of control over the insurer’s management. It has been viewed as responsible for the departure of three of the insurer’s CEO’s in the last three years, the latest being Gianfranco Gutty, who was forced out last September.

The immediate target, according to the DJ report, may be Mediobanca CEO Vincenzo Maranghi. A number of institutions have taken stakes in Generali in hopes of reducing its influence, which it has used to gain advantages from many of Italy’s companies. Limiting Maranghi’s effectiveness might force him to resign, and curtail the power of Mediobanca.

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