The tie-up plan envisages several utilities being rolled into ACSM-AGAM, with regional utility A2A holding 38.9 percent of the merged group.

A2A, controlled by the cities of Milan and Brescia, already holds 23.9 percent of ACSM-AGAM, whose other main shareholders are the towns of Como and Monza.

Since a minimum threshold of minority shareholders at ACSM-AGAM was not reached at the vote on Wednesday, A2A and Lario Reti Holding will have to launch a mandatory bid on all ACSM-AGAM shares at 2.47 euros per share.

(Reporting by Giancarlo Navach, writing by Stephen Jewkes)