MILAN/ROME Italian motorway group Atlantia SpA (ATL.MI) is in talks to acquire Gemina GEMI.MI, which controls Rome airport operator ADR, sources with direct knowledge of the situation told Reuters.
The tie-up of the two companies, both controlled by the Benetton family's holding company Sintonia, would help ADR roll out a 2.5 billion euro ($3.3 billion) investment plan to relaunch its flagship Fiumicino airport by giving it better access to capital markets, the sources said.
The operation would involve Atlantia buying the 64 percent of holding company Gemina that Sintonia does not already own, paying in cash or shares, according to the sources. The operation would also further streamline the Benettons' control chain over some of their infrastructure activities.
At current market prices the stake is worth about 1 billion euros. Atlantia has a market value of 9.1 billion euros.
"Parameters will be defined by the end of January," said one of the sources. "There could be a public tender offer for Gemina or a share swap. There are two or three options."
A second source said: "It is reasonable to think that a board meeting will be held in February (to discuss the deal)."
Under the plan, Changi Airport Group, operator of the Singapore airport and owner of 5.2 percent of Gemina, could end up with shares in ADR with a "put" option and a remuneration scheme based on core profits, the second source said.
Sintonia, which said in December it had not yet started to examine the possible deal in response to press speculation it was mulling a reorganisation of its holdings, controls about 46 percent of Atlantia and 36 percent of Gemina.
The Benettons are best-known globally for their colorful sweaters but the Italian dynasty derives most of its profit from airport and motorway operator Autogrill (AGL.MI) and from infrastructure activities.
A third source with knowledge of the situation said the deal could be announced in the first quarter of this year.
By 1122 GMT on Tuesday, Gemina shares were up 8 percent, adding to a rally of more than 40 percent seen in the last three months. Shares in Atlantia were down 0.3 percent.
After years of regulatory uncertainty, the Italian government in December approved a decree that paved the way for Gemina to raise tariffs and expand the Fiumicino airport.
The planned expansion would bring Fiumicino more into line with international airports such as Madrid, London and Singapore. It foresees 12 billion euros of investments by 2044, of which 2.5 billion would be in the next 10 years.
Gemina in July rebutted a press report that said it was mulling a merger with Atlantia.
($1 = 0.7634 euros)
(Writing by Danilo Masoni; Editing by Lisa Jucca and David Holmes)