A New Prime Minister in Italy Spurs New Hopes for M&A Dealmaking
With a new government in place, dealmaking in Italy is on the rebound.
9 March 2021
On February 13, 2021, Mario Draghi, the former president of the European Central Bank (ECB), was sworn in as the new Prime Minister of Italy. It’s a development that has brought hope to Italian dealmakers who anticipate that investors worldwide will now pursue additional deals in Italy and that mergers and acquisitions (M&A) activity will, in turn, grow rapidly.
Deal flow in Italy is already about 50 percent higher than it was this time last year. That increase has been driven largely by mid-market advisors, although we’re seeing some slowdowns among the larger investment banks such as IBD, Rothschild and Lazard. On the whole, predictions are mixed among our clients in terms of where the M&A market will go. Some expect stability, others envision growth. Regardless, most clients are pitching away on deals. There’s a lot of market activity, although it’s not 100 percent at full speed just yet.
Slowly moving forward
Much of the lag we’re seeing comes from the uncertainty we just experienced. The pandemic brought huge decreases to the Italian markets across multiple sectors, especially at the beginning. Among the first countries to be affected by the pandemic, Italy closed the year down 20 percent in terms of volume and down 30 percent in value. However, big deals have resumed and are currently progressing.
Growth is expected to impact a few key sectors in particular. The Energy sector, especially Renewables, should see a boost given the internal and external pressures companies face to green their operations. Small and medium-sized enterprises (SMEs) represent 99 percent of all businesses in the EU, and Italy has its fair share. Luxury goods make up the majority, but Consumer Goods, Industrial and Financial Services — including bank consolidation and non-performing loan (NPL) deals — are sure to experience a lift as well.
For more 2021 insights on Italy and other regions across the world, check out our detailed M&A market predictions in the Q2 2021 SS&C Intralinks Deal Flow Predictor. Independently verified as a highly accurate six-month forecast of merger and acquisition (M&A) activity, the report is compiled by tracking early-stage M&A transactions that are in preparation or have begun due diligence globally. I invite you to download your copy here.
Alfonso is SS&C Intralinks’ sales manager and country leader for Italy. He has a wide range of experience in M&A, capital markets, real estate and non-performing loans. Previously, he worked as a sales representative in the FMCG sector and was a consultant at Deloitte.