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4. Restrictions on the transfer of shares and voting rights

The Bylaws do not provide any restrictions on the transfer of ownership of shares of the Company. The provisions of law described below, however, impose certain restrictions on the transfer and ownership of shares of Snam.

4.1 Unbundling regulations

The Prime Ministerial Decree of 25 May 2012 (the “Prime Ministerial Decree”) stipulates the “Criteria, conditions and procedures with which Snam S.p.A. is required to comply to adopt the ownership unbundling model of the national gas transportation network and ensure the full separation of Snam S.p.A. from vertically integrated companies producing and supplying natural gas and electricity”.

To this end, the decree provided for the creation, by 25 September 2013, of an ownership unbundling system10 for all regulated natural gas transportation, distribution, storage and regasification activities, and required Eni S.p.A. (a vertically integrated company and an entity that produces and sells energy) to transfer to CDP S.p.A. no less than 25.1% of the equity investment it held in Snam’s share capital, and to dispose of the remainder on the market.

Pursuant to these provisions, on 15 October 2012, CDP Reti S.p.A. (then a wholly owned subsidiary of CDP S.p.A.) purchased 30% less one share of the share capital of Snam from Eni S.p.A. Subsequently, Eni S.p.A. gradually reduced its interest and no longer has a stake in the Company’s capital.

To ensure that Snam is fully separated, Article 2 of the Prime Ministerial Decree also stipulates that:

  1. all decisions relating to the management of equity investments in Snam must be adopted by the Board of Directors of CDP S.p.A. as if the equity investment were part of its “ordinary management” operations even if Snam is included in “separate management” activities of CDP S.p.A. Therefore, the Ministry of Economy and Finance will have no power to guide these decisions, and the members of the Board of Directors of CDP S.p.A. in charge of “separate management” activities will not be able to influence them; and
  2. the members of the administration and control bodies and the executives of Eni S.p.A. and its subsidiaries may not be part of the corporate bodies of, or hold executive offices at, CDP S.p.A. or Snam or their subsidiaries; nor may they enter into any direct or indirect professional or financial relationship with these companies, and vice versa.

Again pursuant to the Prime Ministerial Decree, the voting rights attached to shares acquired (including through deeds, transactions or agreements of any kind), as well as to shares already held, directly or indirectly, by gas and/or electricity producers or suppliers or by their parents, subsidiaries or associates pursuant to the Italian Civil Code, and any powers of appointment pertaining to them, shall be restricted in compliance with the provisions of Article 19 of Legislative Decree No. 93/2011, which governs the ownership unbundling model. Article 19 of Legislative Decree No. 93/2011 stipulates that the same party (whether a natural or legal person) may not:

  1. exercise control, directly or indirectly, over an undertaking that produces or supplies natural gas or electricity and at the same time exercise control or rights, directly or indirectly, over a natural gas or electricity transmission system operator or over a natural gas or electricity transmission system; and
  2. appoint members of the Supervisory Body, the Board of Directors or the bodies that legally represent the company within a transport system operator or a transport system and, simultaneously, directly or indirectly control or hold rights over natural gas production or supply operations11.

Under the aforementioned provisions, shareholders that produce and sell gas and/or electricity are forbidden from exercising voting rights at the Company’s Shareholders’ Meetings. Therefore, they hold only the ownership rights they hold in Snam.

As a result of the legislative changes and Eni S.p.A.’s consequent loss of control over Snam, on 14 November 2013, the AEEGSI adopted Resolution 515/2013/R/gas, implementing its decision to definitively certify Snam Rete Gas as a natural gas transportation system operator under the ownership unbundling regime. By Resolution 318/2016/R/gas of 16 June 2016, adopted following CDP S.p.A.’s sale of shares in CDP RETI S.p.A. to the company State Grid Europe Limited, the AEEGSI confirmed that the requirements laid down in the Prime Ministerial Decree continued to be met.

10 Directive 2009/73/EC, transposed with Legislative Decree No. 93/2011, introduced a set of shared rules for the domestic natural gas market and required transportation companies forming part of a vertically integrated company to (i) adopt a model for the separation of ownership of operators of transportation systems from other non-network activities (ownership unbundling).
As an alternative to full ownership unbundling, the Directive provided for the adoption of models to separate activities by (ii) creating an independent transportation operator that manages and owns the network (Independent Transmission Operator or ITO model); or (iii) creating an independent system operator that manages a network owned by a third party (Independent System Operator or ISO model).

11 Such rights include the power to exercise voting rights and to appoint members of the Supervisory Body, Board of Directors or bodies that legally represent the company.

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