Italy remains one of Europe’s most attractive yet complex M&A markets, especially for foreign buyers seeking established operations rather than greenfield entry. In 2024, over 1,350 M&A transactions were completed in Italy, with total deal value exceeding €70 billion, mainly driven by mid-market acquisitions and private equity activity.

More than 85% of transactions involve private companies, most commonly limited liability companies (SRL), while listed companies (SPA) account for a smaller but highly regulated segment.

Legal Framework Governing M&A Transactions in Italy

Italian M&A is not contract-driven alone. Mandatory statutory rules apply regardless of the governing law chosen in transaction documents. Even when parties choose English or New York law in a purchase agreement, Italian mandatory provisions still override in employment, asset transfers, corporate approvals, and filings.

Law / Regulation	What It Governs	Practical Impact
Italian Civil Code (Royal Decree 261/1942)	Corporate forms, mergers, and share transfers	Mandatory for SRL/SPA transfers, mergers, and capital increases
Legislative Decree 58/1998 (TUF)	Listed companies & takeovers	Tender offers, disclosure, and the passivity rule
Law Decree 21/2012 (Golden Power)	Strategic sectors & FDI screening	Government veto, conditions, and deal delays
Law 287/1990	Antitrust & merger control	Clearance thresholds, remedies
EU Regulation 452/2019	Foreign direct investment screening	Cross-border coordination

Choosing the Right Deal Structure in Italy

Deal structure in Italy determines risk inheritance, tax exposure, speed, and post-closing governance. Each structure serves different strategic purposes and carries distinct legal implications, affecting everything from liability exposure to operational continuity.

Share Deal

A share deal involves acquiring shares or quotas of the target company. Over 70% of Italian M&A transactions use this structure due to speed and operational continuity. In a share deal, you step into the company as it exists, inheriting both its assets and liabilities.

Key legal facts: SRL quota transfers require notarial deeds; SPA share transfers may require updates to the shareholder ledger; and liability is managed contractually through warranties and indemnities. The business continues without interruption, contracts remain in force, and licenses stay valid, making this the preferred route when operational continuity matters most.

Asset Deal

Asset deals are less frequent but strategically used when buyers want to avoid legacy risk. Instead of buying the company itself, you purchase specific assets and assume only identified liabilities.

Mandatory rules under the Italian Civil Code include Article 2112, which requires the automatic transfer of employees and joint tax liability for the current and prior two fiscal years. Buyers may request a tax clearance certificate to cap exposure. While asset deals offer more control over what you acquire, they typically take longer to close and may require renegotiating supplier and customer contracts.

Capital Increase Transactions

A capital increase allows investors to enter without buying existing shares. This structure is common in private equity minority stakes, strategic partnerships, and family-owned succession planning.

Control is achieved through shareholders’ agreements, reserved matters, and board appointment rights rather than outright ownership. Existing shareholders dilute their stakes as the company raises fresh capital, making this attractive when the target needs financing or when sellers want to retain some involvement.

Mergers Involving Limited Liability and Listed Companies

Statutory mergers are governed by Articles 2501–2505 of the Italian Civil Code and require publication of the merger plan, shareholder approval, and a creditor opposition period. This structure is primarily used for post-closing integration, not for entry, because the procedural requirements make it slower and more complex than direct acquisitions.

Cross-Border M&A and Golden Power Risk

Italy operates one of Europe’s most expansive foreign direct investment regimes. Golden Power rules allow the Italian government to impose conditions, modify transactions, or veto deals in strategic sectors.

Strategic sectors subject to Golden Power:

• Energy and utilities
• Telecommunications and 5G infrastructure
• Financial infrastructure and banking
• Healthcare and life sciences
• Data, AI, semiconductors, cybersecurity
• Defense and aerospace

In 2024, over 800 transactions were notified under the Golden Power rules, with conditions imposed in approximately 3% of cases and outright vetoes remaining rare but authentic. Golden Power can apply to share deals, capital increases, mergers, and even minority investments with governance influence. Failure to notify can result in the transaction being null and void and substantial fines.

The notification process typically takes 30 to 45 days, but can extend longer if the government requests additional information. Foreign investors should factor in Golden Power timing when planning deals, especially when acquiring companies in regulated industries or those providing critical infrastructure.

Due Diligence, Valuation, and Governance

In Italy, these elements are inseparable. Due diligence isn’t just about confirming financial statements. It’s about understanding how the company actually operates, what informal arrangements exist, and where governance gaps could create post-closing problems.

Typical due diligence scope covers corporate and governance compliance, employment and union exposure, tax liabilities and audits, real estate and permits, and regulatory licenses. Over 60% of post-closing disputes in Italian M&A stem from governance and shareholder deadlocks, not pricing.

Shareholders Agreements and Control Mechanics

Italian control is exercised through veto rights, reserved matters, drag-along and tag-along clauses, and board composition rules. Shareholders’ meetings have mandatory competencies under Italian law, especially for capital increases, mergers, and amendments to bylaws. Ignoring these limits can invalidate decisions and create disputes that delay or derail strategic initiatives.

Savvy investors use shareholders’ agreements to define decision-making authority beyond what the bylaws require. These agreements specify which decisions need unanimous consent, how deadlocks get resolved, and what happens if shareholders want to exit. Without clear governance rules, even majority shareholders can find themselves unable to execute their strategy because minority shareholders hold blocking rights on key decisions.

Market Context and Strategic Timing

Foreign buyers increasingly favor acquisitions in Italy over setting up subsidiaries because acquisitions offer faster market entry, an existing workforce with permits already in place, and proven revenue streams. Italy’s M&A market sees approximately 1,350 deals annually, with cross-border transactions accounting for about 85% of activity. The dominant deal size is mid-market, private equity accounts for roughly 44% of total value, and Lombardy and Milan remain the most active regions.

Strategic buyers often combine acquisition, subsidiary formation, and shelf company approaches across different growth phases. An acquisition gives you immediate market presence, a subsidiary provides a clean operational structure for new initiatives, and shelf companies can accelerate setup when speed matters more than operational history.

Structuring Authority-Grade M&A Transactions in Italy

A successful mergers and acquisitions strategy in Italy depends on aligning deal structure, regulatory risk, due diligence depth, and corporate governance from day one. Foreign investors who treat Italian M&A as a legal-strategic system, rather than a contract exercise, consistently achieve stronger control, smoother integration, and higher long-term returns.

The Italian market rewards preparation. Companies that invest in thorough due diligence, engage experienced local advisors, plan for Golden Power and regulatory clearances, and structure governance to prevent deadlocks find themselves with acquisitions that deliver on their strategic objectives. Those who rush through the process or underestimate Italy’s regulatory complexity often face costly surprises that erode the value they paid to acquire.

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