I OVERVIEW OF M&A ACTIVITY

In 2015, the Italian M&A market experienced an overall positive trend. Changes in the legal system certainly played a positive role.

II GENERAL INTRODUCTION TO THE LEGAL FRAMEWORK FOR M&A

The legal framework for M&A transactions in Italy is primarily contained in the Civil Code, which governs both contract and corporate law matters. The relevant statutory provisions applying to unlisted companies cover the following.

i Share and quota deals

The most common forms of corporate vehicles provided under Italian law are limited liability companies, which require, in principle, a minimum corporate capital of €10,000, and joint-stock corporations, with a minimum share capital of €50,000. Both joint-stock corporations and limited liability companies benefit from limited liability. The main
differences between these two types of companies affect, inter alia, the method of transfer,2 corporate governance,3 and the liability of the investor.4

The acquisition of listed companies is also subject to Legislative Decree No. 58/1998 (TUF) and CONSOB5 Regulation No. 11971/1999. The rules contained in the TUF and in Regulation No. 11971/1999 apply, in particular, to offers addressed to more than 150 holders of securities in Italy and for a consideration exceeding €5 million.

ii Asset deals

In the event of a transfer of business, the Civil Code ensures the continuity of the business (since, as a rule, the agreements relating to the business are transferred to the buyer by operation of law) and protect both creditors6 and employees. To transfer a business, a notarial deed must be executed before a notary public and registered at the Registry of Enterprises. This type of transaction usually requires the completion of certain pre-closing formalities, such as notice of the transfer to trade unions, and post-closing activities, such as the endorsement of licences and authorisations. The choice between an asset deal and a share or quota deal is usually based, inter alia, on the tax implications of the transaction.7

In terms of a transfer of business in a bankruptcy procedure, one of the most relevant goals of the recent reforms of the Italian Bankruptcy Law8 has been the preservation, to the greatest possible extent, of insolvent business activities, so as not to destroy the organisation previously created by the bankrupt company, and not least in order to preserve employment.

iii Mergers and demergers

The Civil Code provides for a (at least) 60-day procedure for mergers and demergers, including the preparation and approval of the merger (or demerger) project and financial statements, obtaining an expert’s appraisal, etc.

III DEVELOPMENTS IN CORPORATE AND TAKEOVER LAW AND THEIR IMPACT

Starting from 2012,9 significant measures have been enacted to ensure new methods of finance and to stimulate investors to seek funding on the risk capital market, as well as to improve the competitiveness of Italian companies:

i Innovative small and medium-sized enterprises (SMEs)

Law Decree No. 3/2015, converted into Law No. 33/2015, introduced the innovative SME. Together with Law Decree No. 179/2012, converted into Law No. 221/2012, which regulates innovative start-up enterprises and certified incubators, all characterised by the innovative content of their business activity, said new legislative provisions are aimed at encouraging the economic growth of such vehicles through the introduction of specific corporate and tax facilities (e.g., concerning coverage of losses, equity incentive plans).10

ii Issuance of debt instruments by unlisted companies called ‘mini-bonds’11

The introduction of mini-bonds is a significant step towards financing methods that are alternative to the traditional bank debt approach typical of Italian markets.12

Pursuant to the new regulations:

  • a the limits provided for under the Civil Code for the issuance of bonds by joint-stock corporations no longer apply to convertible bonds and to bonds to be listed on regulated markets or multilateral trading facilities;13
  • b the special lien14 on the company’s moveable assets provided for banks15 has also been extended to medium and long-term bonds16 subscribed by qualified investors, thus making investments in such instruments safer than in the past and more appealing; and
  • c a favourable tax regime for mini-bonds has also been introduced.
iii Multiple-vote shares and loyalty shares

Pursuant to Law Decree No. 91/2014, converted into Law No. 116/2014 (Competitiveness Decree), considerable amendments have been introduced in terms of voting rights in joint-stock corporations. Article 2351, Paragraph 4 of the Civil Code now provides for the possibility for non-listed companies to issue shares with up to three votes each (multiple voting shares (MVS)), either at all shareholders’ meetings or at a shareholders’ meeting resolving upon specific matters. As a result, the principle of ‘one share, one vote’ has been definitely overcome. The assignment of voting rights in a way not proportional to the investment made by the shareholders should improve the chances to collect new resources from the market.

For listed companies, the Competitiveness Decree has introduced the possibility of issuing MVS,17 although subject to certain restrictions, and loyalty shares (i.e., shares with an increased voting right, up to a maximum of two votes per shares as a ‘loyalty bonus’ to long-term shareholders).18

IV FOREIGN INVOLVEMENT IN M&A TRANSACTIONS

Foreign investors are more confident in investing in Italy, especially thanks to the improvement of the economic scenario in the country. In 2015, cross-border M&A activity played a major role in the Italian market, generating inbound and outbound transactions amounting to €37.9 billion. Surveys report that, even though the majority of cross-border deals refer to inbound transactions (179 deals, with an overall contribution rising to more than 55 per cent as against 37 per cent in 2014), outbound deals were also completed in 2015 (85 deals, for a value of €9.9 billion).19

According to statistics,20 the major foreign players in 2015 in cross-border deals on Italian targets were the US (about 11.5 per cent of total deals), West European countries (about 30.5 per cent of total deals, relating in particular to Norway, Switzerland and the Netherlands) and China (about 1.5 per cent of total deals).

Among the inbound deals involving US investors, it is worth mentioning:21

  • a the acquisition of a controlling interest in TeamSystem Holding SpA, a leading provider of software applications, by private equity funds affiliated with Hellman & Friedman LLC;
  • b the purchase of Rhiag-Inter Auto Parts Italia SpA by LKQ Corporation Inc for an enterprise value of €1.04 billion;
  • c the acquisition of JK Group SpA, a manufacturer and distributor of innovative inks and consumables serving the digital textile printing market, by Dover Corporation, for an enterprise value of €346.5 million; and
  • d the strategic purchase of the business of Drogheria & Alimentari by McCormick & Co, a global leader in food flavours, for €85 million.

In terms of value, the banking sector was the first-ranked target, followed by the machinery and equipment market. A relevant role was also played by gas, water, electricity, post and telecommunications.22 ‘Made in Italy’ remains a flagship Italian target.23

Countries attracting outbound deals were Romania (about 15.8 per cent of total deals), the US (about 10.5 per cent of total deals) and Western Europe (about 33 per cent of total deals). The favoured sectors for outbound M&A activity were services, machinery, equipment, furniture and recycling.24

V SIGNIFICANT TRANSACTIONS, KEY TRENDS AND HOT INDUSTRIES

An analysis of the market25 showed that the M&A activity in 2015 registered an increase both in terms of value (€54.5 billion, +8 per cent as against 2014) and volumes (547 completed transactions, +1 per cent year on year).

A strategic role in terms of value was played by the consumer markets (25 per cent of total value), followed by the financial services (22 per cent of total value) and the industrial markets (21 per cent of total value). As regards the number of transactions, the most remarkable sectors were, once again, the consumer markets and the industrial markets (respectively, 29 and 23 per cent of total transactions), but also the technology, media and telecommunication industry (16 per cent of total transactions), whereas the financial services counted only 12 per cent of total transactions.26

Key players in 2015 were foreign investors,27 even though domestic deals still prevail in terms of volume (242). Compared to the previous year, the value of domestic deals increased by 20 per cent, reaching €12 billion.28

2015 top deals included the following:29

  • a in the industrial sector, ChemChina, a state-owned conglomerate that also produces tyres, agreed to acquire the tyre manufacturer Pirelli & C SpA (estimated value of the transaction: €7.14 billion);30
  • b in November 2015, Japanese Hitachi Ltd acquired 40 per cent of the share capital of Ansaldo STS SpA, a leading transport systems technology company, from Finmeccanica, for €773 million, and the current business of the rail vehicle manufacturer AnsaldoBreda SpA31 for €36 million;32
  • c Dufry AG acquired, in August 2015, a 50.1 per cent interest in World Duty Free SpA for €1.31 billion,33 thus creating the world’s biggest duty free retailer;
  • d HeidelbergCement AG acquired a 45 per cent interest in Italcementi SpA (value of the deal: €1.666 billion); and
  • e YOOX SpA acquired The Net-A-Porter Group Ltd from Compagnie Financière Richemont SA for about €719 million, thus creating a global leader company in the luxury fashion e-commerce sector.34

In 2015, the financial services sector reached an important landmark increase in the number of M&A deals, with €11.5 billion generated (+51.3 per cent as against 2014). The top 2015 deals in this field were:

  • a the acquisition of 85.29 per cent of ICBPI by a consortium constituted by Bain Capital, Advent International and Clessidra SGR SpA for €1.8 billion;
  • b the purchase of 24 per cent of Generali PPF’s shares by Generali for €1.2 billion;
  • c the purchase of more than 2 per cent shares of Intesa Sanpaolo by People’s Bank of China; and
  • d the completion of the acquisition of BSI SA by Btg Pactual (value €1.8 billion).35

The joint venture between Alfa Wassermann SpA and Sigma-TAU Industrie Farmaceutiche Riunite SpA with the setting up of a new pharmaceutical company is the most relevant deal in the pharmaceutical field over the past few years.

With reference to the ‘Made in Italy’ brand, a 90 per cent participation of Roberto Cavalli SpA was acquired by a newco whose majority shareholder is the private equity firm Clessidra SGR SpA, valuating the business at approximately €390 million.

A considerable increase in private equity transactions was registered in 2015, with 109 operations (+22 per cent as against 2014).36

VI FINANCING OF M&A: MAIN SOURCES AND DEVELOPMENTS

Italian companies have traditionally relied on bank loans. While, after the start of the euro, access to credit had become easier in Italy, a strong reduction in the number of corporate bank loans has followed during the past three years. According to the Bank of Italy, however, such slowdown ended in 2015, with a general reduction of the cost of credit and a major ease of access to credit.37

Between 2009 and 2015, the activity of the Central Guarantee Fund and of Cassa Depositi e Prestiti SpA, a company mostly participated in by the Italian Minister of Economy and Finance, has been important in providing financial support to Italian operators.38

In recent past, significant growth has been recorded in loans secured by securities in rem, which, in the event of a company’s insolvency, offer more possibility for the creditor to successfully recover the relevant amount.

Guarantees secured by Confidi39 decreased by 10.5 per cent with respect to 2014.40

As to new forms of securities, Law Decree No. 59/2016, converted with amendments into Law No. 119/2016, introduced the non-possessory pledge (similar to a floating charge) over certain either already existing or future moveable assets, and over a company’s receivables, for which no dispossession is necessary. Pursuant to the new rules, such assets may be secured under said non-possessory pledge, provided that the pledgor is an entrepreneur; the pledged assets are destined for the carrying out of the business activity of the pledgor; and the secured obligations concern the same business activity.

As regards bonds, in 2015 their issuance was slightly augmented, while the number of bond issuers is lower than in previous years.41

VII EMPLOYMENT LAW

Delegating Law No. 183/2014 is aimed at providing several amendments to the Italian labour law to improve the efficiency of the relevant market, increase occupation and grant a high level of protection to specific categories of workers (women, unemployed people, etc.).

Eventually, eight legislative decrees have been enacted to implement the rules of Delegating Law No. 183/2014. The main amendments to the current legislation can be outlined as follows:

  • a modification of the rules concerning dismissal by providing a regime in which reinstatement in a place of work is a remedy applicable only in a limited and exhaustive number of cases (Legislative Decree No. 23/2015);
  • b cancellation of the ‘Project Work Agreement’ starting from 1 January 2016 (Legislative Decree No. 81/2015);
  • c liberalisation of staff leasing (Legislative Decree No. 81/2015);
  • d the possibility for the employer to modify employees’ duties also beyond the existing limits, as provided for under Article 2103 of the Civil Code (Legislative Decree No. 81/2015);
  • e extension of the current parental leave and maternity indemnity, and provision of a special leave for female victims of abuse (Legislative Decree No. 80/2015);
  • f broadening of the field of application of social shock absorbers (CIGO, the Ordinary Wages Guarantee Fund, and CIGS, the Extraordinary Wages Guarantee Fund) to be activated for workers who are still in employment; restriction of the conditions and durations of the same; and an increase of the costs to be borne by the employer (Legislative Decree No. 148/2015);
  • g to rationalise and simplify inspection activities concerning employment and social security legislation, a unique agency was created with the tasks and powers previously separated between the Ministry of Labour, the National Social Security Institute and the National Institute of Insurance against Accidents at Work (Legislative Decree No. 149/2015);
  • h a new centralised agency for active labour market policies, called ANPAL, was created to foster a better matching of applications and job offers (Legislative Decree No. 150/2015); and
  • i new rules on the employers’ power of remote monitoring of employees entered into force, stating the tools through which remote control can take place and the limits of the utilisation of the information collected by means of said tools (Legislative Decree No. 151/2015).42

VIII TAX LAW

In recent years, the main tax law regulations have successfully contributed to the reversal of the M&A trend market. The most relevant tax measures that have characterised recent years can be summarised as follows:

i The participation exemption (PEX)

The PEX regime allows exemptions for capital gains realised by companies, subject to certain conditions.43 Capital gains achieved in the PEX regime are, in fact, taxed at only 5 per cent of their amount, while any capital losses are not deductible.

ii Tax losses – merger and demerger applications

Since 2011 tax losses incurred by corporations can be carried forward without any time limit,44 and can be offset by up to 80 per cent against the taxable income of subsequent years (or for the overall amount, in cases of tax losses incurred during the first three years).45

iii Increase of tax value of the assets in the case of mergers, demergers and contributions

Contributions of a going concern, as well as mergers and demergers, are generally tax neutral. However, the transferee company (or the company resulting from the merger or demerger) can opt46 to step up the tax value of assets as well as goodwill, if any, arising from the transaction, by paying a lump-sum tax ranging from 12 to 16 per cent of the increased values. As a consequence, assets or goodwill so re-evaluated would reduce the taxable income through higher depreciations or tax-deductible amortisations or, in the case of a sale, through lower taxable capital gains or higher tax-deductible capital losses.

iv Tobin tax

The Tobin tax, which came into force on 1 March 2013, is applicable to the transfer of shares, interest, financial instruments, etc., issued by companies that are resident in Italy. This tax applies, in particular, to purchases of shares and other financial instruments of Italian companies, with the exception of those listed whose average market capitalisation in the month of November of the previous year was less than €500 million.47 The relevant tax rate on a share investment is 0.2 per cent of the transaction value, which is reduced to 0.1 per cent for transactions on regulated markets and monetary transfers of funds.

v Anti-avoidance tax rule and abuse of law

Tax benefits of M&A transactions may be disallowed by the Italian tax administration48 if such transactions are implemented only for the purpose of getting a tax benefit (i.e., without a business purpose). In such cases, the Italian tax administration may order that tax is assessed plus impose fines with interest.

vi Transfer pricing

In recent years, the Italian tax administration has made extensive use of the legislation regarding transfer pricing, in particular focusing on M&A transactions financed through intercompany loans for the purpose of paying less tax. In such cases, the administration regulates the validity of intercompany interest rates by assessing taxes and imposing fines (including interest) should the intercompany rate not be in line with market value.

vii ACE

Since 2011 Italian companies have been able to take advantage of taxable income deductions corresponding to the increases of their net equity multiplied by a notional rate of return of 4.7 per cent in 2016. Contributions in cash and increases of net equity reserves for profits are relevant for this type of deduction. Distributions of reserves and losses incurred are instead only relevant as net equity decreases.

viii Substitute tax on medium to long-term loans

The relevant rates have recently been amended as follows:

  • a 0.25 per cent: ordinary rate;
  • b 2 per cent: loans to individuals for the purchase, construction or renovation of housing, subject to certain conditions;
  • c 0.125 per cent: loans allowed to housing associations; and
  • d 0.05 per cent: export financing longer than 18 months.
ix Exemption from withholding tax on medium and long-term loans granted by foreign entities to Italian enterprises

The ordinary 26 per cent49 withholding tax on interests will not apply should such income be paid to EU banks or insurance companies, or to foreign professional investors residing in a ‘white list’ country that are subject to the control of the supervisory authority in their country of residence.

IX COMPETITION LAW

Until 2015, a mandatory pre-merger filing was required under Law 287/1990 should a concentration have fulfilled both the following conditions: the aggregate turnover reached in the Italian market by the companies involved in the transaction (i.e., buyer group plus target) exceeding €492 million; and aggregate Italian turnover of the target exceeding €49 million.

Starting in March 2016, the above thresholds were increased respectively to €495 million and to €50 million.

As regards filing fees, since 1 January 2013, the filing fee to be paid in the past upon the notification of mergers (equal to 1.2 per cent of the value of the transaction, up to an amount of €60,000) was abolished.

X OUTLOOK

The outlook for 2016 is promising, as demonstrated by the pipeline of relevant M&A transactions, such as:

  • a in the energy sector, the merger of Enel Green Power SpA into the holding Enel SpA;50
  • b the acquisition by CVC Capital Partners Ltd of Sisal Group SpA, a company operating in the gambling sector;51
  • c with reference to its outbound transaction, Exor SpA acquired 100 per cent of the reinsurance company PartnerRe Ltd;52 and
  • d the family office of the Thyssen-Bornemisza family, TBG Holdings NV, acquired a 40 per cent quota of Petrolvalves Srl, a leading manufacturer of valves and actuators in the oil and gas field, from the co-founding family Lualdi, thus becoming the sole quotaholder of the target.53

In first half-year 2016, 298 transactions (total value: €25.3 billion) were reported, of which 105 were inbound deals (€6.7 billion) and 48 outbound deals (value: €10.1 billion). The M&A market has thus achieved its best results since 2008, increasing by 47.1 per cent in terms of value as against first half-year 2015. Even the volume of domestic deals has been remarkable, with 145 completed transactions (value: €8.5 billion). In terms of volumes, the consumer market prevails, whereas in terms of value, the first-ranked field is the financial services sector. Approximately 40 per cent of total deals were financed by private equity funds (for a total value equal to €2.7 billion).54

In 2016, privatisations of public companies should take place. M&A deals are expected to focus in particular on banking, further to the recent reform of cooperative banks, in the food and beverage sector, and in the pharmaceutical industry.55

Footnotes

1 Maurizio Delfino is a partner at Studio Legale Delfino e Associati Willkie Farr & Gallagher LLP. The assistance of Anna Laura Pettoello is gratefully acknowledged.

2 The share capital of a joint-stock corporation is represented by share certificates, which must be transferred in principle through endorsement before a notary public. The corporate capital of a limited liability company is divided into ‘quotas’ that are not securities. To transfer the quotas, an agreement must be executed before a notary public and registered at the Registry of Enterprises, in order for the same to be enforceable in relation to the target company and third parties.

3 Limited liability companies require less formality and expense in their governance compared to that of joint-stock corporations, since, for example, limited liability companies can avoid the appointment of a board of statutory auditors, should certain conditions be met.

4 Although the specifications of such an action are much debated among legal authors, limited liability companies’ quotaholders who have intentionally authorised the target company to carry out detrimental activities may be held liable for damages in relation to the company, the other quotaholders and third parties.

5 The supervisory authority for the financial markets.

6 The seller remains jointly and severally liable with the buyer for debts accrued before the transfer.

7 The sale of shares or a quota may be subject to the registration tax of €200, while the transfer of business is subject to a 3 to 9 per cent registration tax, depending on the assets transferred and calculated on the basis of the value of the deal.

8 The Italian Bankruptcy Law has been radically reformed since 2005.

9 Pursuant to Article 32 of Law Decree No. 83/2012, converted into Law No. 134/2012; Article 36 of Law Decree No. 179/2012, converted into Law No. 221/2012; and to Article 12 of Law Decree 145/2013, converted into Law No. 9/2014.

10 Within this legal framework, more than 5,500 innovative start-up enterprises exist in Italy according to Banca D’Italia’s Annual Report submitted on 31 May 2016 to the ordinary shareholders’ meeting.

11 The term refers to the lower average size of the bonds, when compared with those issued by listed companies. According to the School of Management of Politecnico di Milano, II Report Italiano sui Mini-Bond, 2016, starting from November 2012, the number of mini-bond loans placed so far in Italy is 145 (statistics referred to December 2015).

12 See Cerved, Rapporto Cerved PMI 2015, 2015 and Rapporto Cerved PMI Centro-Nord 2016, 2016.

13 Irrespective of whether the issuer is a company traded on a regulated market.

14 ‘Privilegio’, which is a security similar to a floating charge.

15 Under Article 46 of Legislative Decree No. 385/1993 (Banking Act).

16 Bonds with a maturity of longer than 18 months.

17 Unless the by-laws otherwise provide. However, under Article 127-sexies of the TUF, the issuance of MVS in listed companies after an initial public offering is allowed only provided that such shares have the same characteristics and rights of the pre-existing shares, so that the proportions between the various classes of shares already circulating in the market shall remain unaltered, and upon (1) gratuitous capital increases, (2) non-gratuitous capital increases, whereby all the existing shareholders are granted with an option right to subscribe to the new shares, under the same terms and conditions, on a pro rata basis, or (3) mergers and demergers.

18 Holding the shares for a continuous period of not less than 24 months. Such increased voting right cannot be transferred to a third party by means of an assignment of the share certificates (except in cases of succession upon the death of an individual shareholder or of a merger or demerger involving the corporate shareholder). See Article 127-quinquies of the TUF.

19 See KPMG Advisory SpA, ‘L’M&A estero sull’Italia vale oltre la metà del mercato’, 21 December 2015: home.kpmg.com/it/it/home/media/press-releases/2015/12/l-m-a-
estero-su-italia-vale-oltre-la-meta-del-mercato.html.

20 See Zephyr Annual M&A Activity Report Italy FY 2015 by Bureau Van Dijk.

21 See Fineurop Soditic, Newsletter Italian M&A, 2015.

22 See footnote 20.

23 For references to transactions related to the ‘Made in Italy’ brand, see Section V, infra.

24 Ranking reported in statistics are considered by volume of deals (and not by value of transactions). See Zephyr Annual M&A Activity Report Italy FY 2015 by Bureau Van Dijk.

25 See KPMG Advisory SpA, Rapporto Investment in Italy, 2016.

26 Ibid.

27 See Section IV, supra.

28 See KPMG Advisory SpA, press release ‘L’M&A estero sull’Italia vale oltre la metà del mercato’, 21 December 2015.

29 See Fineurop Soditic, Newsletter Italian M&A, 2015.

30 After the acquisition of 26.2 per cent of Pirelli’s interest by ChemChina at a value of approximately €1.8 billion, a consortium constituted by ChemChina and Camfin purchased the remaining shares through a mandatory tender offer. ChemChina reached a quota in the share capital of Pirelli equal to 96.04 per cent in October 2015.

31 With the exclusion of some revamping activities and certain residual contracts.

32 After that, Hitachi launched a mandatory tender offer on Ansaldo STS’ shares.

33 Further to a mandatory tender offer, Dufry AG now owns the entire share capital of the Italian target (value of the deal: €2.6 billion).

34 This transaction was awarded the ‘Deal of the year’ M&A award 2016 promoted by KPMG, Fineurop Soditic and Class Editori under the patronage of Bocconi University and AIFI, as reported by press release: www.fineuropsoditic.com/media/file/news/CS_MA_AWARD_per_Sito.pdf.

35 See KPMG Advisory SpA, press release ‘L’M&A estero sull’Italia vale oltre la metà del mercato’, 21 December 2015.

36 See Private Equity Monitor Italia 2015 by LIUC.

37 See Banca D’Italia’s Annual Report submitted on 31 May 2016 to the ordinary shareholders’ meeting.

38 Ibid.

39 Consortium that carries out the activity of mutual guarantee to facilitate the granting of credits to their affiliates.

40 See footnote 37.

41 See footnote 37.

42 ‘Remote monitoring’ means monitoring carried out in a topographic area far from the worker (remote in terms of space) or not at the same time as the performance of the service (remote in terms of time), or both, as a result of which the employer monitors the overall conduct of the employee while he or she is engaged in carrying out his or her work duties or during work breaks.

43 PEX is applicable to the occurrence of the following requirements:

a uninterrupted possession of the holdings from the first day of the 12th month preceding the sale;

b investments sold are to be classified in the first financial statements of the owner during the period of ownership under the financial assets;

c the subsidiary company should not have been resident in a black list (i.e., tax haven) country at the beginning of the third tax period preceding the realisation of the gain; and

d the subsidiary company should carry out a trade activity since at least the beginning of the third tax period preceding the realisation of the gain.

44 Up to 2011, they could be carried forward up to five years.

45 Tax losses can be also carried forward following to a merger or demerger, subject to certain limits: tax losses can be carried forward up to the amount of the net equity of the merging or merged companies; tax losses can be carried forward upon the condition that companies generating tax losses are deemed to be ‘operative companies’ (i.e., based on the amount of revenues achieved and personnel costs incurred during two years preceding the merger); and since, from a general point of view, mergers and demergers are tax neutral, any gains or goodwill arising out from the merger or demerger have no effects from a tax point of view. Nevertheless, the company resulting from the merger or demerger has the chance to step up the tax value of the assets or goodwill.

46 The tax revaluation option must be made at the latest with the tax return for the year following that in which the transaction has been implemented.

47 The Tobin tax applies only at the time of the purchase, whereas it is not applicable to transactions opened or closed on the same day. All transactions in foreign markets (with the exception of the French market, the operations of the funds, bonds, exchange traded funds, exchange traded commodities and currency (Forex)) are excluded from the application of the Tobin tax. The Tobin tax is also not applicable to transactions relating to products or ethical services, or to compulsory pension and complementary schemes, or to intragroup transfer of shares.

48 It can even be assessed by tax courts, in the course of a tax lawsuit, pursuant to the abuse of law principle.

49 As from 1 July 2014.

50 See Zephyr Monthly M&A Activity Report Italy, April 2016 by Bureau Van Dijk.

51 See Zephyr Monthly M&A Activity Report Italy, May 2016 by Bureau Van Dijk.

52 See Zephyr Monthly M&A Activity Report Italy, March 2016, April 2016, May 2016, by Bureau Van Dijk. According to KPMG Advisory SpA, press release ‘L’M&A nel primo semestre supera i 25 miliardi di euro’, 29 June 2016, at home.kpmg.com/it/it/home/media/press-releases/2016/06/l_m-a-nel-primo-semestre--supera-i-25-miliardi-di-euro.html, this is the most outstanding transaction in terms of value (€6.9 billion) during the period considered.

53 In 2015, TBG Holdings NV purchased a 60 per cent interest in Petrolvalves Srl from the Candiani family (48 per cent) and the private equity firm Sator SpA (12 per cent).

54 See KPMG Advisory SpA, press release ‘L’M&A nel primo semestre supera i 25 miliardi di euro’, 29 June 2016.

55 See KPMG Advisory SpA, press release ‘L’M&A estero sull’Italia vale oltre la metà del mercato’, 21 December 2015.