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Italian utilities Enia, Iride agree merger

The accord was reached between five northern Italian mayors on Saturday after months of talks. The combined company will have a market value of about 1.34 billion euros ($1.84 billion).

Bologna-based power company Hera SpA, which had been part of the merger talks, said in a statement that a three-way accord had fallen short because the timeframe could not be altered.

In a statement, Enia said the mayors of Turin and Genoa -- which control Iride -- and those of Parma, Piacenza and Reggio Emilia -- the main shareholders of Enia -- had agreed ‘a complete industrial and share merger of high strategic impact for the complementarity of Enia and Iride's business’.

The merger plan has the goal of further tie-ups that would be open to Hera and other sector companies, the Saturday statement said.

It did not give details about governance or the share swap.

However, Turin daily La Stampa said the new company would be governed by a three-year shareholder pact that will have 51 percent of the capital. Turin and Genoa would have 33 percent and Piacenza, Parma and Reggio Emilia 18 percent.

The company will have a single board. The executive chairman will be Roberto Bozzano, now chairman of Iride, and the chief executive will be Iride Chief Executive Roberto Garbati.

Enia Chairman Andrea Allodi will become vice chairman and Chief Executive Andrea Viera will take the general director's job, La Stampa said.

The deal must be approved by shareholders and other shareholding cities as well as by extraordinary shareholder meetings, Enia said.