The calm after the storm: Italian M&A and PE activity in 2023

Report 10 July

The calm after the storm: Italian M&A and PE activity in 2023

Italian M&A market settles after period of hyperactivity

Following a year of intense deal activity, Italy’s M&A market slowed notably in the first half of 2023, with deal volume and value declining year-on-year, according to an exclusive new report from Italian law firm Gatti Pavesi Bianchi Ludovici (GPBL).

The number of M&A transactions in Italy totalled 433 in the first half of 2023, a 30% decline compared with the same period in 2022. The value of these deals also fell, by 86% to €11.6bn. However, it is important to remember that the decline in year-on-year value during this period is mostly a function of a single deal, Atlantia, which inflated deal value in Q2 2022 to its highest quarterly level on record. Studio Legale Gatti Pavesi Bianchi Ludovici advised Edizione on the deal.

The decline in M&A activity is also being felt across Europe. The EU and the UK both experienced similar decreases in terms of deal volume and value. The former is down 35% year-on-year to 5,004 deals while the latter dropped 64% to €190.9bn in aggregate value compared to H1 2022.

Italian growth has slowed, weighing on confidence, but it has not yet entered a recession, as is being seen in Germany. The International Monetary Fund has forecast that Italy’s GDP will expand at a rate of 0.7% in 2023. According to the Italian National Institute of Statistics (Istat), inflation rose to 8.2% in April, up from 7.6% in March. This is the highest rate since 1986, but it should begin to fall as the decline in energy prices since mid-2022 filters through the economy.

“There is no getting away from the fact that last year was a challenge for dealmakers,” explains Gianni Martoglia partner at Gatti Pavesi Bianchi Ludovici. “This year we are at what we should consider a normalisation of the M&A market. Among the most important factors that could help companies grow and therefore also the M&A market, there are digitalisation and environmental sustainability.”

“Private equity funds have significant liquidity ready to be invested. At the sector level, the megatrends are very interesting, and we expect a concentration of interest in the sectors of energy transition, digital transformation, healthcare and innovative technologies,” adds Andrea Giardino, Equity Partner at GPBL.

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