Eyes on Hera and Acea, but not only. The Stability law has in fact given the go-ahead for incentives for mergers between former municipal companies. It is petrol that should make the goal "from 8000 to 1000" take off, a drastic reduction in the number of companies operating in public services, repeatedly announced by Prime Minister Matteo Renzi.
And on the Stock Exchange, in fact, utilities shine on share lists, benefiting from the generalized rebound of the indices but also from the rules included in the financial package for 2015 which should give a boost to consolidation in the sector. In fact, against an overall increase of 600% in the EuroStoxx1,3 for the sector, the shares of Italian municipal utilities are much more lively: +2,4% A2a, +2,7% Hera, +1,7 % Acea, +1,3% Iren.
Article 43 of the Stability Law approved by the government last Wednesday has given operators the opportunity to strengthen their purchases. The first and perhaps the most effective way to push the mayors is the one that unlocks the internal stability pact. In fact, it provides that the proceeds for the Municipalities, deriving from the disposals, can be used by them outside the limits set by the Stability Pact. An important measure because it puts resources back on track, thus encouraging the mayors to use a tool that has often seen them reticent in an attempt to maintain full control over their service companies.
Secondly, the new provision allows the merger between municipal companies to lead to a lengthening of the duration of the concessions. "We believe that this article 43 should be seen as a first step in the right direction which is the reduction in the number of multiutilities to reduce overall costs by increasing the quality of service" underlines Mediobanca Securities which sees Hera and Acea as the first protagonists of a possible consolidation and awaits the details of the government measures by the end of the year.
According to Banca Imi, the new rules could lead to an 80-90% reduction in the number of multi-utility companies with Hera, Acea, Iren and A2a playing the role of aggregators. For analysts, the best positioned in this scenario is Hera.
The decision taken by the government finds support in the study carried out by Astrid and presented two days ago in Rome. On that occasion, Franco Bassanini quantified the number of companies currently operating in the water, waste and electricity-gas sectors, controlled by local authorities, at 1115. An enormous number in the face of insufficient dimensions to guarantee the enormous quantity of investments necessary (between 10 and 15 billion) to bring the level of services back in line with European standards.
To open the risk of aggregations could be just That, whose managing director Alberto Irace has reaffirmed his willingness to proceed with agreements with the Municipalities, especially in Tuscany where the group, leader in water services, is already present in 4 out of six territorial areas and would have an easy time extending its presence .
