Transformations in Italian Capitalism: an Analysis of Olivetti’s Takeover of Telecom Italia

Abstract

Olivetti’s successful takeover of Telecom Italia was an astounding feat that represents a significant change in Italian and European capitalism. As one observer put it, ‘for Americans who have long since grown used to the dog-eat-dog world of hostile corporate takeovers, none of this sounds new. But for Europeans, the ground is shaking’. The fact that Olivetti succeeded in such a flamboyant fashion in acquiring a firm seven times its size indicates that the structure of ownership in Italy is changing and that the Italian stock market has finally become a player in determining ownership and influencing the behaviour of management. In particular, the family-owned and tightly knit ownership patterns of the past are giving way to the influence of shareholders. It is becoming harder for a few shareholders with a limited amount of stock to control a company. Also, foreign investors, in particular, Americans and British, are demanding clearer accounting practices and the reporting of quarterly earnings.