Italian Utilities AEM and ASM Approve Merger

The Milan utility AEM will take over Brescia's ASM to create Italy's third-largest power company, the companies said Monday.

The new utility will have a market value of about 9 billion euros ($12.13 billion) and the merger is expected to be completed by the end of the year, following votes by the respective city councils in July, the companies said in a joint statement.

The new company, which will be based in the northern Italian city of Brescia, will be the third-largest power company in Italy and the largest municipal power company.

ASM is controlled by the Brescia municipality with a 69% stake, while Milan City Hall has a 43% holding in AEM.

Under the deal, shareholders of ASM will get eight AEM shares for every five ASM shares, the companies said. ASM investors will also get a dividend of 0.11 euros ($0.15) a share -- for a total payout of 85 million euros ($114.6 million), the utilities said.

The new combined company will have a dual corporate structure, with a supervisory board and a managing board. It won't have a chief executive, but two director generals instead.

The utilities said the merger is conditional on securities regulator Consob ruling that a bid for remaining shares isn't necessary.