Investigation into Monte dei Paschi di Siena Shakes Generali and Mediobanca Structures

(Alliance News) - The Milan Prosecutor's investigation into the EUR13.5 billion share exchange deal that saw Monte dei Paschi di Siena (MPS) take over Mediobanca is now threatening to unsettle the governance balance at Generali, Italy's largest insurer, Il Sole 24 Ore reported on Friday.

Among those under investigation are entrepreneur Francesco Gaetano Caltagirone, Luxottica and Luxembourg-based holding Delfin's chairman Francesco Milleri, and MPS CEO Luigi Lovaglio. They face various charges, including market manipulation and obstruction of regulatory authorities, over alleged collusion in the transaction.

According to financial circles, the probe strikes at the heart of the current power structure at Generali--known as the Lion of Trieste. Delfin and the Caltagirone Group together control 16.6% of the insurer's capital, while MPS, via Mediobanca, holds about 13%. Altogether, just under 30% of Generali's capital is now closely tied to the outcome of the judicial proceedings. Following Siena's ascent to the helm of Mediobanca, this arrangement had eased years of tension between major private shareholders and Generali's top management, ushering in a period of greater stability.

Breaking down the shareholder register: MPS owns 13.22%, the Caltagirone Group 6.68%, and Delfin 10.05%. This core is joined by Fondazione CRT with just under 2%, the Benetton Group at 4.48%, and UniCredit with a stake below 2%, bringing the total bloc to around 40% of Generali's capital-- theoretically enough to secure control of the company.

The weakening of this balance, notes the Confindustria daily, comes at a crucial juncture for Generali. In the coming weeks, the insurer must make key decisions regarding its delicate partnership with Natixis and, subsequently, the future governance under CEO Philippe Donnet. A pivotal moment will be the board of directors meeting scheduled for December 19, when the board will decide whether to continue the alliance with the French group--a partnership long opposed by private shareholders.

Meanwhile, the regulatory landscape is also becoming more complex regarding Italy's "Golden Power" rules. The European Commission has sent a formal notice to the Italian government concerning its use of special powers, the first step towards possible infringement proceedings should responses in the next two months prove unsatisfactory. According to several observers, this could limit the scope of action for the Ministry of Economy and Finance, not only if the Natixis dossier returns to the fore but also if other European groups, such as France's AXA--long interested in Generali--attempt a move on Trieste.

By Antonio Di Giorgio, Alliance News reporter

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