Italy – Volume down, value up

2024 has been a dynamic year for M&A activity in Italy. Despite an underwhelming 2023 for dealmaking, geopolitical tensions, global economic uncertainties, high inflation and tighter monetary policies, Italian businesses generally showed their resilience and willingness to adapt and pursue new opportunities, which has been reflected in the M&A market.

Investors and acquirers from the US, France and UK were most active on inbound in terms of number of deals, with the US, Switzerland, and France being the most active in terms of value. On the outbound front, the US, Germany, France and UK announced the largest number of transactions, while the US, Germany and Spain announced the most valuable ones.

Private equity’s growing role

In the context of an Italian economy characterised by a robust network of small and medium-sized enterprises (most of which are family-owned), a pivotal role in the M&A landscape was played by private equity funds. Primarily these funds focused on acquiring high-potential companies, particularly in the technology and healthcare sectors, as well as exploring partnerships with local businesses to maximise the creation of value. Indeed, many of the mega and largest Italian deals completed in 2024 have been carried out by private equity funds, as discussed below.

Standout sectors, deals and trends

The financials, energy and telecoms sectors were of most interest in Italian M&A, accounting for around 27%, 22% and 17% respectively in terms of value.

The largest deals in Italy included:

• In financials, the potential entry of UniCredit into the share capital of Commerzbank with an investment of €3.5 billion and the announced hostile public tender offer for the exchange of shares in Banco BPM presented by UniCredit for €10.1 billion.
• In energy, the acquisition of the US listed company Encore Wire, a manufacturer of copper and aluminium power cables, by Prysmian, a multinational company specialising in electrical cables, for a total consideration of €4.4 billion; and the announced acquisition of a 25% shareholding in Enilive (a subsidiary of Eni) by the global investment firm KKR for €2.9 billion.
• In telecoms, the announced acquisition of Vodafone Italia, a telecommunications company, by the competitor Swisscom for €8 billion.

However, in 2024 deal volume was highest in the consumer and industrials sectors.

Furthermore, there was also a particular interest from private equity funds investing in companies active in pet-food, pet care and veterinary clinics.

Meanwhile, ESG considerations are increasingly influencing dealmaking. Businesses with strong ESG credentials are becoming more attractive targets as investors prioritise sustainability and long-term value.