Lawyers, the challenge of bridging gaps

The big deals

Wars and tariffs put the brakes on M&A agreements. Advisor assistance strategic

Uncertainty on the geopolitical chessboard makes transactions more complex and changes the role of lawyers: more and more partners in the search for opportunities and in post-acquisition advice. Made in Italy is still a driving force

26 May 2025

4' min read

Due to the economic situation, the M&A market is navigating by sight in 2025. It is true that large investors, especially private equity investors with a focus on infrastructure and the financial sector, are supporting the sector, but it must also be noted that potential buyers have become much more cautious when considering an acquisition.

'Geopolitical instability,' explains Eliana Catalano, managing partner at BonelliErede, 'in particular the conflict in Ukraine, tensions between China and the United States, and instability in the Middle East, as well as fears about tariffs and their effects, have heightened uncertainty at a global level, directly affecting investment decisions. In the current situation, it becomes very complicated to assess companies and their profitability in the short to medium term'.

'If anything,' notes Paolo Ghiglione, partner at Baker McKenzie, 'we observe a lengthening of time in the execution of individual transactions, which slow down, stop, then resume, and so on: it is a typical phenomenon of recent years, an indirect consequence of the geopolitical situation and market tensions'.

Certainly the Trump uncertainty, which could have consequences on the economy and therefore on the global M&A market, is having an impact, although 'M&A activity in Italy,' says Gabriella Covino, partner of the law firm Gianni & Origoni and member of Gop's steering committee, 'should be on the upswing supported by a more favourable interest rate environment and the growing demand for innovative technologies.

In Italy, the entrepreneurial fabric remains strongly made up of small and medium-sized companies: 'In this context,' continues Eliana Catalano, 'the pressure on margins and the volatility of supply chains make many companies vulnerable, but at the same time attractive for consolidation operations and buy-and-build strategies. However, there is still a mismatch between the valuation expectations of sellers, which are partly anchored to the valuations and multiples of a short time ago in a very different market, and the valuations offered by buyers, which instead cannot but reflect all the uncertainties of the moment'.

Large law firms are thus adapting to new market trends. 'This is happening,' Gabriella Covino continues, 'through a series of strategies that reflect changes in the market, regulatory developments and an increasingly in-depth and targeted sector specialisation. Law firms are increasingly positioning themselves as strategic partners, supporting clients not only in legal advice but also in fostering opportunities, advising on deal structure and post-acquisition change management. From our particular vantage point, we believe that M&A transactions will be increasingly driven by the need to acquire technological expertise and accelerate integration and digital transformation.

As far as M&A's practice is concerned, a difficult market makes M&A transactions more complex, also from a legal point of view, requiring lawyers in this area to identify new structures and solutions to reflect market uncertainties and the consequences these may have on the terms and conditions of the transaction. "For example," notes Eliana Catalano, "we are starting to see in contracts for the purchase and sale of shareholdings, signed at this particular historical moment, specific contractual clauses that deal with uncertainties regarding duties and the effects these duties may have on the transaction itself.

The market therefore becomes more competitive. 'When deal execution times get longer and several deals start but then stop,' says Paolo Ghiglione, 'it is important to redouble efforts to collect as many assignments as possible, and at the same time to have a team of professionals who know how to handle the peaks of work when deals resume.

Despite the difficulties, Made in Italy retains a very strong appeal. "Sectors such as food, fashion, design, precision mechanics and luxury goods are considered an excellence and, above all, difficult to replicate elsewhere. Many foreign investors, especially international funds, see Italian SMEs as an opportunity to enter niche markets with established brands, distinctive know-how and high export capacity,' explains Eliana Catalano.

Another area of interest remains infrastructure and technology: 'Infrastructure funds are investing and continue to look closely at strategic Italian assets related to energy transition, sustainable mobility and the circular economy. Moreover, the Tmt sector is expected to recover in 2025, due to both the need for consolidation in digital infrastructure and mobile, and the demand for innovative technologies such as artificial intelligence, cloud computing and cybersecurity. The aerospace & defence sector is showing signs of growth, supported by increased government spending,' says Gabriella Covino. In this context, 'private equity funds,' continues Eliana Catalano, 'remain key players, especially in countercyclical sectors and in buy-and-build operations, where they can create value through consolidation.

The spotlight is on the moves of foreign multinationals interested in entering the Italian market. "The current market offers opportunities for both private equity funds and strategic buyers. Although private equity funds are very active, there are also many opportunities for strategic buyers, for example in sectors such as energy and financial services,' concludes Paolo Ghiglione.