The proposed merger of Fiat’s Telettra SpA telecommunications subsidiary with Italian state-controlled Italtel SpA has passed its final hurdle with the Italian government formally approving the combination. Fiat and Stet SpA, the state controlled telecommunications holding company, will each have 48% of the new Telit SpA, with state-controlled merchant bank Mediobanca holding the ring with 4%. Telettra’s specialisation is transmission equipment while Italtel majors of digital switching systems. The combined company has annual sales of about $1,500m – Italtel is about twice the size of Telettra – and 23,000 employees. Its priority will be seeking alliances with other European companies, and L M Ericsson has made an early pitch by offering the new company a shareholding in Ericsson of as much as 10%. Other companies that have been approached with a view to partnerships include Plessey and GEC here and Siemens AG in Germany.