End of Olivetti As A Separate Company
In the 1990s, Olivetti's computer businesses were in great difficulty, reportedly because of the competition from US vendors. It was on the brink of collapse and had needed government support to stay afloat. A company in transition, it had moved out of the typewriter business into personal computers before embracing telecoms between 1997 and 1999. In the process it had lost around three-quarters of its staff.
In 1999, The Luxembourg-based company Bell S.A. acquired a controlling stake in Olivetti, but sold it to a consortium including the Pirelli and Benetton groups two years later. Olivetti then launched a hostile bid for Telecom Italia in February 1999, despite being less than a seventh of the size of its target. In a take-over battle against Deutsche Telekom, and other potential bidders, Olivetti won out and controlled 52.12% of former monopoly Telecom Italia, Italy's #1 fixed-line and mobile phone operator. However, the ownership structure of the merged Olivetti / Telecom Italia was complex and multi-layered with Olivetti took on around $16 billion of extra debt. It was then referred to as the "Olivetti/Telecom Italia affair" because of the unpleasant secret affairs behind.
A 2003 reorganization turned the tables, however, and now Olivetti is the office equipment and systems services subsidiary of Telecom Italia. In 2003 Olivetti was absorbed into the Telecom Italia group, maintaining a separate identity as Olivetti Tecnost.
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