Edison

Early history (1884–1966)

Founded in 1884 by Giuseppe Colombo in Milan, Italy, as "Società generale italiana di elettricità sistema Edison", it served the purpose of introducing and applying Thomas Edison's inventions to Italy. The company initially aimed to supply electricity to the cafes and restaurants in the city. Colombo, an engineering professor, was a great admirer of Edison, whom he had met in the United States in 1881, securing an exclusive licence for some of his patents for Italy and hiring some of his collaborators. Edison operated the Santa Radegonda power plant, Europe's first power plant.

In the following decades, Edison continued growing, especially in hydroelectric power, and came to control power distribution in most of northern Italy. In 1962, the centre-left coalition government of Christian Democrats and Socialists decided to nationalize the electric sector in Italy to break the oligopolistic power of the four dominant electric companies that comprised the market. With the compensation money it obtained from the state, Edison, then headed by Giorgio Valerio, invested heavily to diversify its activities, primarily in the petrochemical sector and by buying the Standa supermarkets chain, continuing producing power only for self-consumption. This strategy was unsuccessful, though, as competition with both state-owned Enrico Mattei's giant Eni and Montecatini, a large private chemical company, proved too hard, so in 1965, Edison was eventually forced to merge with Montecatini, forming Montedison, the largest chemical company in the country.

Montedison era (1966–2001)

Montedison initially was doing well, dominating about 80% of the national chemical market and 15% of the European Community market, but the 1973 oil crisis proved disastrous for the company as it was forced to seek state intervention to avoid bankruptcy; by the mid 1970s, the Italian state came to own about 17% of Montedison, becoming its largest single shareholder, but its effective control was even greater as state-owned banks held shares. The company became increasingly an arm of state social policy, and employment goals were favored over profits.

In 1980, Mario Schimberni became chairman and negotiated the sale of the state-owned shares to Gemina, a consortium of banks and private companies, to free Montedison from government interference. Through a rigorous cost-cutting plan and joint ventures with Mitsui and Hercules Inc., Schimberni transformed the money-losing manufacturer of commodity chemicals and plastics into a profitable, diversified holding company.