Deals of the year 1999: M&A

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MERGERS & ACQUISITIONS

Colaninno’s Houdini act

Acquirer: Olivetti

Type of deal: takeover of Telecom Italia

Amount: e60 billion

Launched: February 20 1999

Advisers: Chase Manhattan, DLJ, Lehman Brothers, Mediobanca

Audacious deal, shame about the aftermath: that at least is the prevalent opinion on Olivetti’s conquest of Telecom Italia, one year after the Piedmontese company launched its hostile, reverse, leveraged takeover. The consequence of Olivetti’s use of a shell company, Tecnost, to perform an LBO on one of Europe’s major telecoms players is a brittle shareholding structure with the debt at one end of the group and the profits at the other.