Changes in ownership and minority protection: Governance lessons from the case of Telecom Italia

Purpose – The purpose of this paper is to report on the study of the two acquisitions of Telecom Italia carried out by Olivetti and Pirelli in the last decade, to evaluate how changes in ownership structure and corporate governance affected minority protection. Design/methodology/approach – The paper presents an analysis of how Olivetti's and Pirelli's takeovers were achieved. Then the authors contrast the two operations with regards to extraction of private benefits and expropriation of minorities' wealth. Findings – Shows that, in the case of Telecom Italia, the implementation of pyramids is connected with the existence of large private benefits, and that the acquisitions resulted in the substantial expropriation of minority shareholders. Research limitations/implications – The analysis is referred to a very unique case. While a lot can be learnt from this approach, generalisations are not trivial. Practical implications – The conclusion is that groups owning several listed companies deserve a special discipline, as many are the policy implications of their presence in financial markets. Originality/value – Proposes an ad hoc methodology to consider companies from the top to the bottom of the pyramid chain, and to put in a common framework the non-simultaneous operations linked by a common strategic goal, namely an acquisition. Further, a set of governance lessons is provided.