Italy's government and highway regulator have rejected the proposed take-over of road operator Autostrade by Spanish rival Abertis, they said in statements on Friday.
Economy Minister Tommaso Padoa-Schioppa in a joint statement said he and Infrastructure Minister Antonio Di Pietro were against the multibillion euro deal because construction companies would number among the core shareholders of the merged company, raising a conflict of interest.
Highway regulator ANAS in a separate statement added it had also blocked the deal having taken into account the "negative view expressed by the ministers."
ANAS, which owns Italy's highways and has a concession deal with Autostrade to operate them, signalled its decision was final.
"No further investigation procedures are necessary," it said.
Autostrade, one of Europe's largest toll operators, declined comment saying it was awaiting more details on the decision.
Autostrade and Abertis surprised investors earlier this year announcing a deal in which Abertis would take over Autostrade, with Abertis chief executive running the merged entity. The deal would have created the world's biggest toll road operator.
The take-over faced opposition from Romano Prodi's centre-left government from the outset. The Italian government feared the deal would sap vital infrastructure investment from Italy.
Italy's rejection of the take-over comes only a year after Italian banking authorities rejected Spain's Banca Bilbao Vizcaya Argentaria take-over bid for a Roman bank.
As such it is likely to reignite debate about possible national protectionism in Europe.
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