Why it is risky to redraw the map of Italian airports without a tender process

The point is simple: why not hold a tender? This is the question that has been circulating for days regarding the possible merger between SEA, which operates Linate and Malpensa, and Sagat, the operator of Turin Caselle. On 6 October, the Milan City Council’s Subsidiaries Committee is due to begin discussing the project, which has raised political and legal concerns. But even before determining whether the merger is cost-effective, whether it makes industrial sense, whether it serves to strengthen the northern airports or to create synergies between Milan and Turin, there is a more fundamental question: if, through that operation, a private entity is set to increase its influence within a publicly controlled company, why not use a competitive tender to ascertain whether better terms are available?

Today, the City of Milan owns 54.8 per cent of SEA. F2i, through 2i Aeroporti, owns around 45 per cent and has full control of Sagat. The proposal under consideration is a merger between the two companies, a move that would inevitably lead to a dilution of Palazzo Marino’s stake. At this point, one might argue that there is nothing particularly surprising about this: if a smaller company is absorbed into a larger one, the shareholdings change, and what matters in the end is the value of the new entity. True. But it is precisely for this reason that the issue cannot be reduced to the percentage of shares held. What those shares enable one to do also matters – and perhaps above all else. If the merger were to be accompanied by new shareholders’ agreements or amendments to the articles of association capable of granting the private shareholder greater rights regarding the appointment of the chief executive, business strategy, the budget or investments, the municipality could formally continue to hold a majority whilst simultaneously having less power than before. This is a scenario that needs to be assessed today, not a foregone conclusion. But precisely because it needs to be assessed, it raises a question that should be of particular interest to the public shareholder: how much are those rights worth? And what does the local authority receive in return for a possible rebalancing of governance?

This is where the tender process comes into play. Not as a bureaucratic formality, nor as a means of blocking the transaction. On the contrary: as a way of determining whether the proposed transaction is truly the most advantageous. A competitive tender serves precisely this purpose: to compare values, investments, conditions, guarantees and governance rights. It serves to put a price on something that would otherwise risk being decided simply through negotiations between the parties already at the table. The documentation on the transaction specifically identifies this as one of the contentious points: the possible strengthening of the private shareholder’s governance would take place without a competitive process, with potential implications for the future contestability of the public shareholding. Naturally, a merger does not automatically amount to a sale of shares, and it would be incorrect to pretend that the legal issue has already been resolved. Article 10 of the Consolidated Act on Publicly Owned Companies provides for procedures governing the disposal of shareholdings that are based on publicity, transparency and non-discrimination, and permits direct negotiation only in justified cases. The key issue, therefore, is to ascertain whether and to what extent these rules apply to this specific transaction.

But the response “it’s not a sale, it’s a merger” cannot, on its own, bring the discussion to a close. If the merger results in a substantial change to the powers exercised over a public asset, it is reasonable to ask why that decision must be made without putting it to the market. All the more so given that an alternative route exists, at least in theory: Sea could acquire Sagat whilst keeping its shareholding structure unchanged. This does not mean that this solution is necessarily better. It might be too costly, it might be less efficient, it might make less business sense. But the very fact that it exists shows that there is not just one way to achieve the same objective. And when there are several ways to carry out a transaction involving a public asset, the question of comparing the alternatives becomes hard to avoid. Giuseppe Sala, too, has set out two very clear conditions: to create economic and social value for both areas and not to alter SEA’s current corporate structure. The PD group leader at Palazzo Marino, Beatrice Uguccioni, has called for a discussion – prior to any decision – on the business plan, the corporate balance and the economic and employment implications. In short, the issue should not be whether one is for or against the merger. It could be an excellent deal. But precisely if it is, it should be possible to demonstrate this. This is the issue that is worth keeping distinct from everything else.

There is no need to wait until a corporate matter becomes a legal case to ask whether a procedure is sufficiently transparent and competitive. In Cagliari, where another airport deal has raised precisely the issue of the lack of a public tender process, the debate has progressed much further. But in Milan, the question can be asked earlier, whilst decisions are still to be made. If a tender is not necessary, it would be useful to know clearly why. If, on the other hand, it can serve to gauge the value of the project and better safeguard the public interest, the question remains, stubbornly simple: why not hold one?