Italy is planning to step up corporate takeover scrutiny with a new unit within the cabinet office to supervise mergers between strategic businesses, according to sources.

Prime Minister Mario Draghi’s government has used ‘golden powers’ to establish conditions on numerous mergers, impeding attempts by China to increase its presence within the economy.

The government is seeking to set up a new Directorate-General in Draghi’s office to bolster Rome’s ability to oversee modifications to the ownership of strategic firms, the sources told Reuters news agency.

One of the new bureau’s tasks will be "strategic analysis of what is happening in relevant markets," with more staff being drafted in, purely to focus on takeovers.

Within plans to boost the so-called golden powers, Italy’s government is planning to finalise new rules forcing firms owning sensitive assets to disclose initial talks regarding a potential takeover.

Last month, new measures were implemented requiring companies operating 5G networks to supply detailed information every year on anticipated mergers.

These special powers have been extended to take into account insurance companies and banks, as well as potential takeovers of Italian firms by other EU businesses, the Reuters report adds.

The ‘golden powers’ had only been used twice in 10 years before Draghi became Prime Minister. He has used the veto four more times in just over 12 months, the latest being last month when Rome blocked the sale of a military drone company to Chinese investors. 

Firms have seen a rise in red tape due to these new requirements, as they are informing the government of any possible deals and mergers, even when not required. The number of notifications rose to close to 500 in 2021, compared to 342 in 2020 and 83 the year before.

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