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Resilience in challenging times: Italian M&A and PE activity in 2022

Against a challenging macroeconomic backdrop, Italian M&A value shone in 2022, with €104.3bn worth of deals eclipsing 2021’s €85.3bn of transacted value, according to an exclusive new report from Italian law firm Gatti Pavesi Bianchi Ludovici (GPBL).

The rise in total Italian M&A value was primarily due to the largest transaction of the year, the much publicised €42.7bn acquisition of Atlantia (the Italian based conglomerate active in the international infrastructure sector) by Edizione – the Benetton family’s holding company – in partnership with Blackstone Group.

Without the Atlantia deal, Italian deal value was down 28% on 2021. Deal volume, on the other hand, recorded a 16% increase year-on-year, from 844 transactions in 2021 to 980 in 2022. This points to strong mid-market activity (deals valued between €5 million and €250 million), with acquirers overall focusing on smaller plays. It also contrasts favourably with the regional average – the EU region plus the UK saw a decrease in overall deal volume of 3% over the same period.

Francesco Gatti, founding partner at Gatti Pavesi Bianchi Ludovici adds: “The relative strength of Italy’s M&A volume compared with Europe at large is a testament to the country’s attractiveness. This is evident from the role that foreign financial sponsors continue to play in the largest transactions. No fewer than seven of the top ten largest M&A deals featured a PE fund on the buy-side. These funds have pan-European and often global investment mandates, and their continued presence in Italy shows their commitment to the country and their recognition of its unique opportunity set.”

“There are still several drivers that will ensure deals flow through, even in a more fraught operating environment,” comments Carlo Pavesi, founding partner at Gatti Pavesi Bianchi Ludovici. “Corporates in need of strengthening their balance sheets will seek divestitures of non-core assets. Strategic reviews are another reliable catalyst. For example, ESG pragmatism is building, and companies are relying on M&A as a shortcut to future-proof their core businesses. The digital imperative is another strong motivator and technology assets have experienced some of the deepest repricing of any sector in the current inflationary, higher-rate environment.”