STMicro names new Italian board members, defusing tension with Rome

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ROME (Reuters) -STMicroelectronics announced on Thursday the appointment of two new Italian members of its supervisory board, signalling that Italy and France were moving to settle their differences over the chip maker’s governance.

The group, in which the French and Italian governments indirectly own a combined 27.5% stake, has battled an industry-wide sales slump since the end of the COVID-19 pandemic, hit by low demand, high inventories, and geopolitical disruption.

Veteran ambassador Armando Varricchio and former STMicro executive Orio Bellezza will replace Maurizio Tamagnini and Paolo Visca on the board, the company said in a statement.

The appointments will be subject to shareholders’ approval at a meeting set for December 18, it added.

Italy and France clashed in April, when STMicroelectronics rejected a previous Italian candidate for the board, former senior Treasury official Marcello Sala.

That month, Italian Economy Minister Giancarlo Giorgetti said his government’s attitude toward STMicroelectronics CEO Jean-Marc Chery was one of “criticism and opposition”.

Relations have improved since, and all parties are trying to iron out tension to cooperate on a relaunch of the company, a source familiar with the matter said, speaking on condition of anonymity.

In a first sign of efforts to settle the dispute, STMicroelectronics pledged last month not to slash jobs in Italy, committing to a plan for voluntary departures with trade unions.

According to the source, the Egon Zender consultancy is likely to be picked to screen potential candidates for the CEO position, replacing Chery, whose term expires in 2027.

(Reporting by Giuseppe Fonte; Editing by Alvise Armellini and Clarence Fernandez)