Golden Power and the conversion into Law of the Liquidity Decree

The spread of the Covid 19 epidemic has resulted in a significant extension of the special powers attributed to the Government in terms of protecting strategic assets from predatory acquisitions by foreign investors (and not only).

With the D. L. n. 23/2020 (the “Decree”) of the last 8 April, the Government strengthened its Golden Power regulations, also following the European Commission’s indications. The Member States had been encouraged to equip themselves with adequate control mechanisms to prevent the health crisis from leading to a sell-off of their assets by European industrial and commercial operators.

The law no. 40 of 5 June 2020 (the “Law”)converted, with some amendments, the Decree into law.

Firstly, the Decree provided that fall under the Golden Power regulations, in addition to the so-called strategic sectors – (energy, transport and communications) the “Extended Sectors”, namely: “critical infrastructures”, “critical technologies”, “critical production factors”, “sensitive information “, “freedom and pluralism of the media “and” agro-food and steel sector “. The Law clarified that the financial sector (which is a critical infrastructure) includes the credit and insurance sector. Then it was specified that the health sector (which is also a critical infrastructure) includes the production, import and wholesale distribution of medical, surgical and personal protection devices.

Among the novelties introduced by the Decree, in certain cases and until 31 December 2020, non-EU subjects should notify their purchase transactions. In particular, for those wishing to acquire stakes in companies that hold assets or relationships in the Extended Sectors, or in companies that operate in the transport, energy and communications sectors, such obligation was introduced when certain thresholds are exceeded (10%, if the transaction has a value greater than € 1 million, or a stake greater than 15%, 20%, 25% or 50%). During the conversion, it was specified that the thresholds of 15%, 20%, 25%, and 50% refer only to the company’s share capital. The 10% threshold, on the other hand, refers to both the company’s share capital and voting rights.

Conversely, the Law does not clarify which transactions are subject to the above notification obligations. In its original formulation, the Decree established that the acquisitions concerning all the assets and relationships relating to the Extended Sectors should be notified, but a series of decrees should have defined in greater detail the specific assets subject to notification. The Law does not say anything on this point. Therefore, the provision of the Decree seems to apply (at least until 31 December 2020).

Luca Condoleo