The European Commission (EC) has granted authorization for the joint control acquisition of Italo by MSC Mediterranean Shipping Company and the American fund Global Investments (GIP III). This operation primarily concerns the high-speed rail passenger transport market in Italy, as well as travel agencies and passenger maritime transport via ferries or cruises.
Italo is one of the leading private European operators of high-speed trains. Italo - Nuovo Trasporto Viaggiatori S.p.A. (NTV) was the first entirely private operator to break the FS(Ferrovie dello Stato) monopoly on the high-speed railnetwork.
The company was founded in 2006 by Luca Cordero di Montezemolo, Diego Della Valle, Gianni Punzo, and Giuseppe Sciarrone, with the intention of competing with Trenitalia on Italian high-speed lines, in anticipation of the liberalization of the railway sector in the European Union. It is a unique model in Europe, studied worldwide, and taken as an example by countries that have subsequently liberalized the market. Since its debut in 2012, Italo has grown to manage a fleet of 51 high-energy-efficient electric trains, connecting 51 cities across Italy and serving over 20 million passengers annually.
On October 2nd, 2023, MSC acquired 50% of the shareholding. Mediterranean Shipping Company S.A. (MSC) is a global transport and logistics company owned by the Aponte family – founded in 1970 by shipowner and entrepreneur Gianluigi Aponte – based in Geneva. This company has signed a binding agreement to acquire 50% of Italo from Global Infrastructure Partners (GIP), a leading independent investor active in the infrastructure sector. Therefore, the MSC group becomes the majority shareholder of Italo, and will control Italo through its SAS – Shipping Agencies Services, based in Luxembourg.
The other approximately 50% stake in Italo will continue to be owned by GIP, which will have joint governance with MSC, with some entities of the Allianz Group and funds managed by Allianz Capital Partners, as well as other co-investors.
The operation has an enterprise value of 4.2 billion euros, including 934 million euros of net financial debt. In the final arrangement, Gianbattista La Rocca will be confirmed as CEO, and Luca Cordero di Montezemolo will retain the position of chairman.
The latter stated that this operation will give rise to the "first intermodal group in Europe", with the aim of offering an integrated mobility service that includes trains, ships, and buses, advantageous for the country, travelers, and tourists. Indeed, MSC's entry into Italo, as the world's leading cargo line management company and one of the largest cruise ship companies, will facilitate integration between maritime routes, trains, and buses. The purpose of the operation is precisely to "establish a long-term strategic partnership for the future development of Italo".
Italo's first goal with MSC as a partner will be to strengthen the fleet, which is expected to increase from the current 51 trains to 60 by the second half of 2027, and the buses that make up the Itabus fleet.
The operation, which had already been formalized last October, was only awaiting clearance from the EU Antitrust, which has indeed arrived after less than a month of controls. The concentration request was in fact deposited and registered in Brussels on February 2nd.
The need to apply for the authorization of the European Commission is linked to the application of Community Antitrust legislation, legislation already present in the founding Treaties and now contained in Articles 101-102 TFEU. Indeed, the purchase of 50% of Italo's shares from MSC constitutes a hypothesis of concentration between undertakings, which is defined as a transaction by which one undertaking acquires control, even in fact, of another undertaking. Such situation is clearly integrated in this case. The Community framework, also transposed in Italy by L. 287/1990, provides for transactions that may impact trade between States carried out by companies of certain sizes the need for prior authorization by the European Commission. For operations that do not impact on trade between States, thus, having only a national character, the authorization is instead provided by the AGCM (Autorità Garante della Concorrenza e del Mercato).
In fact, concentrations, especially when they are horizontal in nature involving companies operating in the same market – as is the case with Italo and MSC, which are in fact transport companies – can generate distorting effects on the market by hindering competition between companies. Indeed, the criterion used by the Commission to decide whether to authorize a concentration or not is precisely the impact that such concentration will have on the market.
Specifically, one wonders whether dominant positions can be created or strengthened from that operation by analyzing, through a prognostic judgement, the impact that the transaction once concluded would have on consumers and other companies.
Compared to the other two figures analyzed by the Treaty and the Italian discipline, namely understanding and abuse of a dominant position, for which the Commission pronounces only ex post, that is, an analysis of a conduct already held by the companies involved, the concentrations are subjected to a preventive examination for practical reasons. To also subject the concentrations to a subsequent evaluation would mean, in fact, if an anti-competitive effect emerges, having to put in place a reverse operation that is difficult to implement. Moreover, precisely through a preventive evaluation, the Commission can impose on the companies involved some corrections to be adopted to guarantee the neutrality of the operation, with benefits also for the same companies that can comply to the decision without having to bear excessive costs.
For the sake of completeness of the investigation, it must be added that in addition to the horizontal concentrations, vertical concentrations are also subject to the European Commission's prior examination, i.e. those put in place by companies operating at different levels of the production chain, as happens when the producer of a certain good acquires control of the main distributor of that good. In these cases, there may be a distorting effect of competition, especially for all other producers and distributors of that good who could be in a market strongly dominated by the company in question. In general, however, it is the responsibility of the companies involved in the transaction to assess whether, by dimensional thresholds and by reference market, the transaction can have an effect on competition by notifying, in the event of a positive assessment, of the willingness to carry out the transaction to the Commission. If the transaction is not notified, and once finalized the Commission were to recognize the creation or strengthening of a dominant position, in addition to imposing economic sanctions, could require the company to put in place corrective measures that are sometimes very onerous for the same.
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