Inbound dealmaking activity to Italy from elsewhere in Europe has plunged this year, but M&A practitioners are confident that attractive multiples mean the lull could be short-lived.

Animal spirits among Italy’s venerable financial institutions have hogged headlines this year, but – away from the spotlights – uncertainties over global trade have made it harder for Italian dealmakers to get inbound transactions off the drawing board.

As a result of the unpredictable trading environment, European dealmaking in Italy has fallen by 80% in the year to date (YTD) from YTD24 to a combined EUR 3.4bn, according to Mergermarket data. At the same time, the number of deals fell 19% to 133, the lowest level since YTD21.

However, low multiples compared to those found in other European countries mean that Italy still remains attractive for foreign investors, Orlando Barucci, managing partner at Vitale, said.

The average enterprise value (EV)/ EBITDA multiple in Italy for deals announced so far in 2025 is just 6.92x, according to Mergermarket data. This is based on 32 transactions that disclosed this metric. By contrast, the average multiple in the rest of Europe in the same period was 9.67x, based on 247 deals.

Private equity (PE) bidders are being more aggressive than strategics in exploiting the valuation gap, data shows.

There have been five buyouts by European PEs in the YTD worth a combined EUR 1.1bn. This is only the fourth time that this result has been above EUR 1bn in the YTD period this century.

An example of a large deal came in May when a group of investors led by London-based sponsor Terlos agreed to buy Casa Optima, an Italian artisanal gelato and pastry ingredients maker. The deal was reported to be worth EUR 900m.

UK interest grows

Although inbound activity from other European countries is down significantly in the YTD, the UK is an exception. There have been 18 deals with an Italian target and a British bidder worth a combined EUR 1.1bn. The result, which is helped by the Casa Optima deal, is the highest level since YTD21.

As well as the UK, investors from France have been particularly active in Italy, Antonio Solinas, senior partner at Deloitte, said.

Buyers from France were the most active by deal count, with 32 deals in the YTD worth a combined EUR 526m. However, this was down from 36 transactions worth EUR 3.1bn in YTD24.

One particularly large example came in February, when Audensiel, a French consultancy firm backed by Sagard, Capza, and Ardian, announced a takeover of digital transformation company FOS, triggering a mandatory takeover.

Paris-based PE Ardian, one of Audensiel’s shareholders, has been particularly active in Italy in its own right. The sponsor has already announced three deals in Italy in the YTD, according to Mergermarket data. It has announced 84 deals in the country since 2008.

Meanwhile, Spain has taken the second spot by volumes, with 13 deals, also worth EUR 1.1bn, which is the highest level in a decade. This was helped by a large shipping deal in June, when the Mediterranean Shipping Company (MSC) was reported to have increased its stake in Boluda Towage to 50%. The target had projected revenues of EUR 1.2bn for this year.

Di Sano, Sostelia in focus

Mergermarket‘s proprietary intelligence shows a number of inbound M&A situations inching closer to an announcement. For example, Di Sano, a producer of nut and dried fruit products, is in the final stages of a sale to a Spanish strategic.

Meanwhile, Xenon is working with Rothschild to sell its water-technology business Sostelia. Information memoranda (IMs) were sent to PEs and strategic players.

Finally, Mergermarket‘s auctions tool shows a strong pipeline of opportunities for overseas buyers who want to look for bargains in Italy. There are 40 auctions in a pre-launch phase plus 28 underdetermined.

The whole pipeline across all phases includes 109 situations. This represents nearly 13% of the live auctions tracked by Mergermarket throughout Europe.

Attractive multiples and an abundance of targets mean that the slump in inbound interest could be a short one, particularly if strategic buyers follow in the footsteps of those PE firms that have remained active.