Italian M&A Activity Drops to €80 Billion in 2022 from €100 Billion in 2021

The value of Italian m&a deals in 2022 falls to €80 billion from the €100 billion reached in 2021. This is spread over a total of 1,184 deals, down 2.5 percent from 1,214 deals in 2021. The figures, which must obviously be placed in a context of strong macroeconomic and geopolitical uncertainties and which in 2021 were pushed up by the conclusion of the Stellantis deal (that alone was worth about €20 billion), were calculated by KMPG in its latest report “M&A Market in Italy in 2022.” where it shows that last year was particularly active for both foreign investors, with 421 deals (+15 percent compared to 2021) worth about €29 billion (+67 percent compared to €17 billion in 2021) and for both private equity funds, with 131 deals for €19 billion from the 200 deals for €12 billion in 2021.

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These data, when compared with different periods in 2022, indicate an acceleration of m&a in the last quarter of the year

According to KPMG’s report, 781 m&a transactions were formally closed in Italy in the first nine months, down 14 percent from 906 transactions in the nine months of 2021, for a total value of about €56 billion, itself down from €71 billion in the first nine months of 2021, which was affected, however, by the conclusion of the Stellantis transaction. In the first half of the year, on the other hand, 537 deals had been concluded (down 13 percent from 616 deals in the six months of 2021) for a countervalue of about €30 billion, down from €52 billion in the first half of 2021, on which, again, the Stellantis deal had an impact. In the first quarter, on the other hand, there were 239 deals concluded (down 20 percent from 298 in January-March 2021) for a countervalue of about €17 billion (from €30.2 billion).

For Max Fiani, KPMG partner and editor of the report, “the last quarter saw the closing of the main deals for 2022 achieving results beyond expectations, and far exceeding the figures for 2019, the last year before the pandemic (€52 billion for 1,085 deals). Operators, particularly financial ones, have shown strong interest in the world of infrastructure and energy resources, in line with the main directives dictated by the NRP and the needs that have emerged from the new geopolitical and economic environment. These are investments that guarantee greater visibility in the expected financial flows.”

In fact, the important role of private equity funds as financial partners is confirmed, in order to support Italian entrepreneurial families in the paths of growth by external lines or internationalization. According to KPMG calculations, in 2022 the funds concluded as mentioned above 131 deals worth more than €19 billion from the 200 deals worth €12.1 billion in 2021.

But that is if only direct investments by funds are considered. Instead, taking into account both investment and divestment activity, and considering deals announced by funds and those conducted by private investor club deals and investment holding companies. As for the value of the deals, there were 20 deals on companies with an enterprise value of at least €500 million and involving Italian companies, in which at least 15 percent of the target companies’ capital changed hands. Of these, 12 deals involved companies with an EV of at least €1 billion. But there were also a fair number of deals (8) of medium to large size on companies with EV of at least €300 million and just under €400 million. Several mega deals had closed in 2021 as well, and many are still important by Italian market standards. In particular, BeBeez had counted as many as 40 private equity deals on companies with EV of at least €500 million, and involving Italian companies with at least 15 percent of the target companies changing hands. Of these, 24 deals were on companies with an EV of at least €1 billion.

Indeed, private equity funds were the protagonists of some of the largest m&a transactions announced during the year

KPMG among the most important transactions recalls that of Holding Reti Autostradali spa, (a consortium formed by CdP spa, at 51%, and for the remaining 49% by The Blackstone Group International Partners and Macquarie European Infrastructure Fund 6) which acquired about 88% of Autostrade per l’Italia for a countervalue of more than €8 billion. The deal was reached in the last quarter, as was the takeover bid by Edizione and Blackstone’s Holding Schema Alfa of about 70 percent of Atlantia for a total consideration of €12.7 billion, which took the Benetton holding company off the Italian stock exchange. Also worth mentioning are Exor’s sale of the reinsurance group PartnerRe to Covea for more than 8 billion; the entry into the share capital of Falck Renewables, and the subsequent takeover bid by Infrastructure Investment Fund (JP Morgan AM) for a total countervalue of about €3 billion; and finally, the sale to a consortium of investors led by Ardian of an additional 41 percent stake in Holding Daphne 3, which holds a 30.2 percent stake in Infrastrutture Wireless Italiane, an operator in the mobile telecommunications infrastructure sector, for €1.3 billion.

With reference to the main target sectors, support services and infrastructure is the most attractive sector, in terms of countervalue, with 31% of the total market. This is followed by financial services, with 24 percent, energy&utilities with 15 percent, and the TMT sector with 12 percent. Starting with the former, the KPMG report highlights the financial services recorded more than 100 deals for €19.5 billion, a countervalue positively impacted by important acquisitions in the traditional, insurance and banking sectors, such as the aforementioned PartnerRe and the delisting of Cattolica Assicurazioni by Generali Assicurazioni for a countervalue of 239 million, and by the strong activism in fintech, insurtech and digital payments, where total investments of more than 2.6 billion euros were recorded.

The energy&utilities sector was positively influenced by EU directives favoring energy efficiency

There have been numerous extraordinary transactions implemented by major national operators in pursuit of their strategic objectives in the area of energy transition. The latest transaction, completed in the fourth quarter of 2022, is the sale of Enel Transmission Chile to the Chilean group Inversiones Grupo Saesa Ltda, for a total consideration of approximately €1.3 billion. The transaction is part of a divestment program that Enel has initiated, involving the sale of assets totaling €21 billion, which will be mostly completed by 2023. Finally, of note is the sale of Saipem’s onshore drilling division to the British group KCA Deutag, for €573 million.

Finally, in the TMT sector, the tower company Cellnex (participated by Edizione) completed the acquisition of CK Hutchison’s telecommunications tower assets in the United Kingdom for a countervalue of €3.7 billion, thus completing the last transaction of the agreement signed in late 2020 to acquire the European mobile tower business from CK Hutchinson.

On the subject of new listings, the report recalls the IPO of Technoprobe, active in the semiconductor and microelectronics sector, which raised €713 million on the Italian stock market through the placement of about 21 percent of its share capital, and the listing of Industrie De Nora Group, which specializes in electrochemistry and is a leader in sustainable technologies for the green economy, which raised more than €480 million for 17.4 percent. KPMG also reports the listing of Vår Energi, Eni’s 63.1 percent stake, which is active in hydrocarbon exploration and production, on the Norwegian stock market with a placement of about 16 percent for a total raising of about €1.3 billion. It represents the largest IPO in the oil and gas sector in Europe over the past 15 years.

On the downside is the “take to private” phenomenon that has characterized major international stock exchanges. In 2022, there were 18 delistings in Milan alone, 16 of which were through takeover bids, totaling €15 billion. Among the most important were the aforementioned Atlantia, Autostrade per l’Italia, Falck Renewables, Cattolica Assicurazioni, and Banca Carige. Adding to the delisting is the transfer of Exor from Euronext Milan to Euronext Amsterdam and the delisting of Costamp Group’s financial instruments from trading on Euronext Growth Milan.

“We can say that the year ended in a context where once again financial operators, companies and entrepreneurs demonstrated their ability to deal with often momentous challenges: from the conflict between Ukraine and Russia to the energy crisis, from the sharp rise in the cost of money to inflation, offering an important proof of resilience. In this complex scenario, m&a has proven to be an essential tool for responding to strongly and rapidly changing, often unpredictable scenarios,” Fiani concludes.

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(Featured image by 089photoshootings via Pixabay)

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