Further Italian utility mergers unlikely -report

MILAN, May 30 (Reuters) - There is unlikely to be any more consolidation among Italy's big municipal utilities, partly because of political difficulties, the head of Iride (IRD.MI: Quote, Profile, Research), which is merging with peer Enia (EN.MI: Quote, Profile, Research), told a newspaper.

"I think in general the era of big mergers between former municipal utilities is over," Chairman Roberto Bazzano told Milano Finanza newspaper in an interview published on Saturday. "Any further merger would bring with it considerable problems of governance and of expanded command structures," he said.

Iride, controlled by the northern Italian cities of Turin and Genoa, is merging with Enia, which is controlled by 72 town halls with the town of Reggio Emilia in northern central Italy as the main shareholder.

Bazzano said he thought the new group could be launched at the beginning of August, but "it's more likely that Iride-Enia will take off at the beginning of October".

The merged company will be one of Italy's biggest multi-service utilities, worth nearly 1 billion euros ($1.40 billion).

Another regional utility conglomerate, A2A (A2.MI: Quote, Profile, Research), had to postpone its shareholder meeting on Friday as local politics flared over control of its supervisory board. [ID:nLT1016216]

Bazzano said there was still space for deals in the water management and rubbish collection sectors, adding in the water business, "there's a big opportunity for growth in the north" of Italy.

"We've certainly looked at the situation and singled out some targets."

Although Bazzano did not specify any targets, Milano Finanza said some sources suggested the first target would be Smat, which runs water services in Turin and the surrounding area. (Reporting by Jo Winterbottom, editing by Mike Peacock)