These were two very opinionated, dynamic individuals. In the end, when shareholders opted for the rival bid from Olivetti's Roberto Colaninno, Telecom Italia's chief executive Franco Bernabe had to leave. In order to protect market share from new competitors, European companies feel they need to grow. In addition, the introduction of the euro has made it easier for them to raise the cash to buy other companies. The most obvious form of defence is attack, and one of the easiest ways to secure fast growth is to buy another company.
Companies are now more likely to go on the prowl because it is easier to borrow cash to do so.
The advent of the euro means that investors in the eurozone can lend money to companies without any currency risk. Relatively low interest rates also help. Olivetti's bid for Telecom Italia was made possible by its borrowing on the eurobond markets. Another factor spurring European merger activity is privatisation. The sale of government-owned businesses has meant that larger companies with the ability and inclination to acquire rivals are coming on to the market.