ROME (03/20/2000) - Internet Capital Group of the U.S. and Italy's electricity utility ENEL SpA today signed an agreement for the creation of a joint venture to act as an incubator for Internet applications in the business-to-business (B2B) e-commerce sector, the companies announced.
Both companies will own a half share in the new company, which will have a share capital of US$10 million and is to become operational immediately, the companies said in a joint statement. The incubator will identify market opportunities, develop business plans and launch new B2B initiatives, which may also involve the supplier base of the ENEL Group.
The incubator will take advantage of ICG's B2B know-how and ENEL's expertise in Italian industry and the utilities sector, according to the companies.
Under the agreement, signed by ENEL Chief Executive Officer Franco Tato and ICG CEO Walter Buckley, ENEL will acquire a $25 million stake in ICG and Tato will join the European advisory board of the Wayne, Pennsylvania-based company.
"Our strategy for attacking the various markets is always to look for the best partner, creating new companies as quickly as possible," Buckley told reporters at a press conference in Rome. ICG, which numbers IBM Corp., General Electric and Compaq among its investors, considers the new venture to be its most important European partnership so far, he said.
The e-commerce venture will be principally directed toward ENEL's network of suppliers, Tato told reporters. "This constitutes a change of ENEL's strategy toward them, involving the use of Internet for the purchase of materials and the conduct of tenders," Tato said.
ENEL has a 51 percent stake in Italy's third mobile phone operator, Wind SpA.
"Wind will certainly participate in the initiative, but it remains to be seen how," Tato said.
Another Italian Internet incubator, CDB Web Tech Investments SpA, was quoted on Milan's New Market for the first time today, Italian news agencies reported.
The board of the new company, which invests in Internet, telecommunications and new technologies, met in Turin today under the chairmanship of former Olivetti SpA chairman Carlo De Benedetti to consider a package of investments worth 800 billion lire ($400 million) over the next year, the reports said.
The company plans to increase the pace of its direct investments in unquoted companies, De Benedetti was quoted as saying by the ADN-Kronos news agency. The company has opened offices in Palo Alto, California and New York and intends to establish a presence in Israel, Brazil, Hong Kong and India, De Benedetti reportedly said. So far the company's investments have been concentrated in the U.S. and Israel, with 140 billion lire already invested and a further 500 billion lire pledged, ADN-Kronos said.
ENEL can be contacted in Rome at +3906-8509-7652 or on the World Wide Web at http://www.enel.it.