By Giuseppe Fonte

ROME, (Reuters) – Italy has ruled RAI must retain a 30% share in Rai Way’s towers unit Rai Way. This was according to a draft decree by the government that was revealed to Reuters on Wednesday.

Reuters reports that Mario Draghi, the Italian Prime Minister, signed a decree allowing RAI’s Rai Way holding to be reduced to below 51%. This move is expected to lead to sector consolidation.

It could open up the possibility of merger talks between Rai Way, EI Towers and EI Towers. This long-rumored deal would result in a combined group valued at more than 2 Billion Euros ($2.2 Billion) within the TV and radio mast sector.

RAI is allowed to cut its Rai Way stake up to 30% while keeping “control over such strategic infrastructure”, according the decree. It also stated that towers firms should not be listed.

Rai Way shares were 2.2% higher at 1233 GMT on Tuesday, following a close of 5.86% on Tuesday.

Intesa San Paolo analysts stated in a report, that the 30% threshold should not be used to prevent consolidation with EI Towers or its potential for synergies.

Banca Akros stated that EI Towers had approximately 600m euros of net debt more than Rai Way. This meant RAI, in the event of a merger between equals, would still be “well above” the 30% new limit.

RAI may offload holdings in a variety of ways, such as “one or more exceptional merger deals”, direct negotiation, or a public offering. However, the decree does not specify a deadline.

Rome reverses a 2014 provision that required Rai Way to remain in the public domain for at least 51%. This was due in part to Rai Way’s strategic importance and infrastructure.

EI Towers tried to buy Rai Way from Matteo Renzi in 2015. But, the takeover was stopped by the center-left coalition government.

At the time Silvio Berlusconi, former conservative prime minister was in control of EI Towers via broadcaster Mediaset (OTC). Renzi didn’t want Rai Way assets to be controlled by Mediaset’s media magnate.

EI Towers now has 60% control by fund F2i, and 40% by MediaForEurope. Mediaset is the new name.

($1 = 0.9162 euros)