The Italian Government has selected Bank of America Merrill Lynch as adviser to privatize the state owned railway operator Ferrovie dello Stato (FS).

According to sources, the privatization process is expected to star by the end of this year.

The Italian Treasury Ministry has also selected Cleary Gottlieb Steen & Hamilton, an international law firm headquartered in New York City, as legal adviser for the railway privatization.

FS manages infrastructure and services on the Italian rail network. One of the subsidiaries of the company, Trenitalia, is the main rail operator in Italy.

The company was privatized in 1992 with the creation of the new Ferrovie dello Stato SpA, a joint-stock company, following European guidelines. However, the privatization was only formal, since shares were still owned by the Italian Government.

On 1 June 2000, the two main divisions, service and infrastructure, were separated and two different independent companies were created: Trenitalia, responsible for transport service, and Rete Ferroviaria Italiana, responsible for the management of the rail infrastructure. Both companies were still subsidiaries of Ferrovie dello Stato Holding SpA

In early August we reported that the Government of Spain had also selected Bank of America Merrill Lynch to underwrite the IPO for the partial privatization of Spanish airport operator, AENA.