LONDON - Mediobanca announced plans on Friday to sell stakes in a number of Italian companies for a combined 1.5 billion euros ($2 billion), as the financial giant looks to untangle itself from the country’s struggling corporate sector.
The move, which also will see the Italian bank write down assets worth roughly 400 million euros, includes the sale of part of its stake in the Italian insurance company Assicurazioni Generali and the local telecommunications firm Telecom Italia.
Mediobanca, which was founded during World War II and helped shepherd many of Italian’s largest companies through the subsequent reconstruction, built up large stakes in these businesses, including the automaker Fiat, allowing the bank to voice its opinion on how the companies were run.
Yet in the face of Italy’s economic troubles, Mediobanca is now loking to shed its holdings to bolster its own profitability, and its actions may soon open the door to international investors looking for potential deals.
A sale of the stakes would be a major shift in the country’s corporate sector after decades when Italian companies have held major stakes in each other. While Mediobanca has sold its stake in Fiat, the Italian bank has remained a large shareholder in many of the country’s largest companies.
These corporate cross-shareholdings have come under pressure during the financial crisis, as many of the Italian companies and banks have suffered slowdowns in their revenues because of dwindling domestic growth.
Other countries, including Greece and Spain, have faced similar problems after the countries’ banks have been forced to offload their shareholdings in local companies in a bid to improve their own profitability.
On Friday, Mediobanca said that it would reduce its holding in Generali to 10 percent, from 13 percent by 2016, ! as well as reduce its stake in other Italian companies, including the local publisher RCS Mediagroup.
The bank said the divestments would help refocus its operations on its investment and retail banking units, and its wealth management operations. The strategic overhaul also will see an expansion into international markets, including emerging economies like Turkey and China. The bank said it expected to report a 200 million euro loss in the 12 months ending on June 30 after it had written down the value of some of its assets.
Shares in Mediobanca fell 4.2 percent in afternoon trading in Milan on Friday.
Despite a number of assets coming to the market, Europe’s mergers and acquisitions market continues to trail that of the United States, whose rebounding economy has helped to reignite potential deal activity.
One small ray of light in Europe has been the Continent’s telecoms and cable sector, which has seen a flurry of acquisitions, including the purchase by John C Malone’s Liberty Global of the British cable operator Virgin Media for $16 billion earlier this year.
