From Poste to Mps, the big games in Italy that attract foreign investors

Strong interest from foreign investors, especially North Americans, in all Italian asset classes. Confirmation of the sale of a stake in Poste Italiane, but according to modalities and timing yet to be defined to ensure Italy's best consistency on the market. And a clear no from the government to play the role of bank in the Mps affair. The speech by Marcello Sala, head of the Economy Department of the Ministry of Economy and Finance, both clarifies the government's political-industrial-banking position and kicks off the fourth edition of the Merger&Acquisition Summit 2024, organised by Il Sole 24 Ore and 24 Ore Eventi, in Milan on Tuesday 16 April. "Europe in general and, even more specifically, Italy attract large foreign investors, especially from the United States, Canada and the Gulf countries, because it is less expensive than the US market," Sala comments in a video link from Rome. With regard to the sale of a stake in Poste Italiane, he adds: "After the political process, through the Dpcm and parliamentary commissions, it is now up to the Mef to define the market opportunities, the timing, and the types of operation. All doors remain open'. Asked what the government plans to do with Mps, Sala's answer is clear: 'We do not intend to act as banks. Again, we are trying to ensure Italy's consistency in the markets'.

One of the first speakers at the M&A Summit 2024 was Giulio Tremonti, chairman of the Committee on Foreign and Community Affairs, who compared the present time to the 1500s because of the four revolutionary events that occurred and whose similarity echoes in today's events the discovery of America - the discovery of Asia; the invention of printing - the knowledge of the web and artificial intelligence; the arrival of Muslims from the East - war from the East; the first financial crisis (the Kingdom of Spain defaulted six times) - the risk of a financial crisis today. "The difference is the timing: now everything is happening in a very short time and the EU is the epicentre of the crisis because of the ongoing war and because this is where the beginning of the end of globalisation is manifesting itself," comments Tremonti. On the Italian M&A ecosystem, the former minister acknowledges a certain attractive, not repulsive, power of the Italian fiscal and legal environment that favours foreign interest, thanks to some interesting regimes, such as the absence of inheritance tax if there is business continuity.

From Kpmg comes the most detailed analysis of the global and Italian market. At a global level, the M&A 2023 market records an increase in deals (46,179, +7% on 2022), but a significant drop in countervalue (-26% on 2022) for a total of USD 2,623 billion. In the first quarter of 2024, Mega Deals - which were most missed last year - are back, with 10,500 deals announced for $797 billion (+38% over Q1 2023). At the Italian level, 1,270 deals were recorded in 2023, with a 60% drop in countervalue (EUR 35 billion), again due to a lower incidence of large deals. However, there was a strong recovery in Q1 2024 with EUR 15 billion (+55% on Q1 2023) of M&A countervalue, making this first three months one of the best starts in the last 10 years. An important contribution came from the Energy, Industrial and Financial Services sectors. "It is interesting to note that 38% of transactions in the Italian M&A market 2014-2023 are directed abroad," comments Silvano Lenoci, head of corporate finance partner Kpmg. On the private equity front, the global market in 2023 recorded 34,664 transactions (-22% compared to 2022) for a countervalue of USD 1,618 billion (-29% compared to 2022). In Italy, the data reported investments of 8.2 billion euro (they were 23.7 billion in 2022, a drop therefore of 66%) and 750 deals compared to 848 in 2022 (-12%). "The main global market trends are generative artificial intelligence, quantum computing and the projected costs associated with cybercrime: we are talking about $9.5 trillion in 2024," explains Lenoci. "And then the green transition and circular economy, with the growth of Esg, and demographic longevity." On a more local level, the most relevant topics are internationalisation and consolidation among Italian companies to create European champions, and the role of private equity and private capital as operators for growth and the creation of poles of excellence in Italian-made products.

Finally, forecasts for 2024 concern the central banks' lowering of interest rates, a reduction in the estimated inflation rate and moderate volatility in the financial markets, which are accompanied by a forecast of medium-large M&;A deals in all sectors, starting with Tmt, Energy/Utilities and Healthcare. "In the absence of a recessionary macro-economic scenario," Lenoci concludes, "a performing domestic M&A market can be hypothesised with volumes in excess of one thousand deals and countervalues estimated at around EUR 60-70 billion.