The string of agreements reached between Plessey Co and Italtel SpA ahead of the latter’s merger with Fiat SpA’s Telettra unit seemed a little perverse – surely better to strike deals with the board of the new company once it was in place. But now it is becoming clear that Plessey was quite right to forge ahead with the agreements, because hopes are beginning to fade that the merger will ever go through. The ostensible point of contention is the role the IRI-Stet state holding company, which was to have ended up with 48% of the proposed Telit firm, is assuming to itself in the appointment of mangement to the new firm. Fiat first started to complain a couple of months ago when the state uni-laterally announced that Italtel managing director Marisa Bellisario would hold the same post in the merged company. Fiat said that it did not object to Ms Bellisario per se, only to the fact that the appointment was announced without it being consulted. According to the Financial Times, politicians and officials of the Mediobanca state-owned but due to be privatised merchant bank, which was to have held the ring with 4% in Telit, are increasingly pessimistic that the merger will go through. If it does not, the Italian telecommunications industry will remain fragmented and unable to make much impact on world markets – and the Italian market will come under increasing foreign pressure.
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