I OVERVIEW OF M&A ACTIVITY

In 2018, the Italian M&A market saw an increase of approximately 21 per cent in the number of transactions compared to the previous year (around 1,000), amounting to around €94 billion in value. The M&A market trend was characterised by two major transactions, Essilor/Luxottica and Atlantia/Abertis, amounting to around €41 billion. Some relevant transactions were also completed in the first quarter of the 2019.2

II GENERAL INTRODUCTION TO THE LEGAL FRAMEWORK FOR M&A

M&A of unlisted joint-stock companies, limited liability companies and limited partnerships are regulated by the Italian Civil Code (Civil Code). The rules applicable to listed companies are set forth in the Civil Code and in the Italian Securities Act3 and implemented by secondary regulations adopted by the Italian Securities and Exchange Commission, the public overseeing authority of mergers and takeovers, and the Italian Stock Exchange (Borsa Italiana), the private company in charge of the management of the Italian securities market.

Listed companies may also adhere to the Code of Corporate Governance issued by Borsa Italiana, which, for the signatories, follows the comply or explain model.

Certain transactions are subject to merger control clearance, which, depending on the nature of the companies involved and the sector in which they operate, is issued by the Bank of Italy, the Italian Antitrust Authority (IAA) or the Insurance Regulation Authority.

In terms of structure, M&A transactions can come in the form of acquisitions of companies through share (and quota) deals, asset deals, leveraged buyouts, tender offers, turnarounds, equity carveouts, mergers and demergers, or combinations of these.

The main forms of transactions covered by Italian law are asset deals, share and quota deals, and mergers and demergers. The choice of one structure over the others entails different consequences in terms of legal implications and tax consequences.

i Asset deals

Asset deals concern the direct transfer of a business (inclusive of employees, assets, know-how, contracts, etc.). The Civil Code, as a rule, provides for the continuity of such business – agreements related to the activity are automatically transferred, except for those having personal connotations, pursuant to Article 2558 of the Civil Code, and the seller remains jointly and severally liable with the buyer for debts accrued before the transfer pursuant to Article 2560 of the Civil Code. Depending on the number of employees involved, prior notice of the transfer of a business to the union representing its employees is required (while such notice is not required in a stock deal). An advantage of asset deals lies in the possibility to choose the perimeter of the business to transfer, with the option of expressly excluding certain assets while including others, and of excluding certain liabilities. This may represent an advantage, for example, to the buyer, who may so be protected from risks connected to the previous management of operations by excluding their transfer.

As to the transfer itself, an asset transfer agreement must be executed before a notary public and registered at the relevant company register.

A potential disadvantage in choosing an asset deal is the application of stamp duties in proportion to the value of the business; on the other hand, the buyers may enjoy a step-up in the value of the transferred assets (see Section VIII).

ii Share and quota deals

In share and quota deals, the underlying business is the indirect object of the transfer, which, instead, directly concerns the shares or quotas. Thus, no specific protection is given by the Civil Code on a company's assets and on the continuity of the business activity unless specific representation, warranties and covenants are carefully drafted in the stock purchase agreement.

Italian case law now tends to admit that the duration of the contractual representations and warranties may exceed the duration of the shorter annual statutory guarantees related to sale and purchase agreements provided by law.4

As to the transfer itself, share certificates representing the capital of joint-stock companies must be transferred through an endorsement before a notary public, whereas if the transfer involves the quotas of limited liability companies, the agreement must be executed before a notary public and registered at the company registry to be validly enforced towards third parties.

iii Newco share deals

Recent trends in business transfers have included the use of an M&A structure consisting of the creation of a wholly owned newco on the part of the seller to which the latter transfers, by means of a contribution in kind, a business, with the subsequent transfer of the shares or quotas of the newco to a buyer. Setting aside the tax effects (see Section VIII), compared to an asset deal, such structure allows for a clear separation of the business on the part of the seller and its direct dealing with employees and other stakeholders (creditors, suppliers, customers) prior to closing. On the other hand, in the case of a breach of agreement and a refusal to close by either party, the enforcement and specific performance of the M&A agreement, with the transfer of the business by judicial order, might be more difficult, leaving an option to claim for damages.

iv Mergers and demergers

The Civil Code regulates mergers (Article 2501 to Article 2505 quater) and demergers (Article 2506 to Article 2506 quater). Mergers can be in the form of mergers by acquisition or mergers by incorporation. In both cases, pursuant to the principle of continuity set forth by Article 2504 bis Civil Code, the company resulting from the merger assumes the same rights and obligations as the companies participating in the merger. Despite the above principle, in reality, real estate assets falling into the realm of a merger still require registration for tax purposes, pursuant to Article 4 of the attachment to Legislative Decree No. 347/1990; and a cadastral transfer pursuant to Article 1, Paragraph 276 of Law 244/2007.

The merger procedure set out by the Civil Code entails:

  1. the drafting of a merger project by the directors of the companies participating in the merger;
  2. approval of the merger project by the relevant shareholder assemblies (for unlisted companies, with a majority of at least one-third of the outstanding share capital also in a second call of the assembly);
  3. the drafting of financial statements;
  4. directors' reports describing the economic and legal reasons underlying the merger project;
  5. an expert's appraisal of the exchange ratio of the shares or quotas of the company resulting from the merger to be attributed to the shareholders; and
  6. the execution of the merger deed before a notary public.5

Article 2501 bis Civil Code expressly provides for mergers by means of a leveraged buyout. Before the introduction of this provision in 2003, the implementation of this type of transaction was heavily jeopardised by the provision of Article 2358 of the Civil Code, which, at that time, did not allow for a company to provide securities or issue loans for the purchase of its own shares.

As to the limits, companies that are in a winding-up procedure may not participate in a merger if the distribution of their assets has already begun, pursuant to Article 2501 of the Civil Code. Such limit only concerns joint-stock companies.

A delicate aspect to consider in mergers and demergers is the protection of the minority shareholders, if present. To this end, the exchange ratio, which represents the price of the transaction and is determined by the directors of the companies participating in the merger, is a crucial aspect of the merger itself. It is important to note that such ratio has to be described by the directors in their report pursuant to Article 2501 quinquies Civil Code and appraised by an expert appointed by the court pursuant to Article 2501 sexies Civil Code. Minority shareholders might challenge the validity of a merger until the deed of merger is registered. Thereafter, their claim is switched to a claim for damages.

III DEVELOPMENTS IN CORPORATE AND TAKEOVER LAW
AND THEIR IMPACT

Recently, new measures have been introduced to accelerate credit recovery procedures of non-performing loans and facilitate the issuance of new credit, also to the benefit of M&A transaction financing, and new provisions have been adopted aimed, inter alia, at favouring the business continuity of insolvent or distressed companies. Among the most significant innovations are the following.

i Business Crisis and Insolvency Code

Legislative Decree No. 14 /2019, setting forth the new Business Crisis and Insolvency Code (CCI), was published in the Italian Official Gazette on 14 February 2019 and will enter into force on 15 August 2020. The CCI shall apply both to natural persons (consumers, professional and entrepreneurs) and to legal persons, and consequently all types of debtors, with the exception of the state and public entities.

The main changes set forth in the CCI with respect the current Insolvency Law are the following:

  1. certified restructuring plans (Article 56): this procedure now has its own specific regulation within Article 56 of the CCI; the restructuring plans shall set forth the milestones to check the actual implementation of an insolvency plan and the actions to be taken in the event that these are not accomplished;
  2. debt restructuring agreements (Articles 57–64): the CCI confirms the need for distressed debtors to finalise a debt restructuring agreement with creditors that represent at least 60 per cent of the total amount of claims, and introduces a facilitated debt restructuring agreement (Article 60 CCI), reducing the creditor threshold from 60 to 30 per cent. The facilitated debt restructuring agreement can be used only in cases where the distressed debtor is granted no delay for the payment of creditors who have not signed such agreement, and no temporary protective measures have been requested by the debtor towards the creditors;
  3. the composition of creditors (Articles 84–120): the CCI maintains the already existing two-scheme structure of liquidating all assets or preserving a business as a going concern, which can be carried out directly (by the debtor) or indirectly (by third parties). The CCI introduces a series of restrictions on the composition of creditors based on the liquidation of a company's assets, thereby preserving the continuation of a business. A significant change from the current system is that the court will be required to also assess the economic feasibility, and not only the legal maintainability, of the plan supporting the proposal of the composition of creditors (Article 47);
  4. judicial liquidation (Articles 121–283): the term bankruptcy has been replaced by the term judicial liquidation (and all bankruptcy-related words have been modified accordingly), but the change is purely lexical, since a judicial liquidation maintains the same nature of the current bankruptcy proceedings;
  5. compulsory administrative liquidation (Articles 293–316): an exclusive insolvency procedure for banking, fiduciary and insurance companies; and
  6. a single proceeding to enter judicial restructuring and liquidation procedures: the CCI also establishes a single judicial process to ascertain an insolvency, applicable to all debtors irrespective of the nature of the ensuing insolvency proceedings, which shall precede the possible insolvency procedures (Articles 40–53).

In addition, the CCI has introduced a new out-of-court procedure providing for a newly non-jurisdictional composition body, the OCRI, which will be set up within the Chambers of Commerce. According to this new procedure, the OCRI will be in charge of a consultation procedure to help distressed companies return to solvency through agreements with creditors or resorting to a restructuring or insolvency procedure. In the event that this procedure fails, and a distressed debtor remains in a state of insolvency, the OCRI shall send a report to the Public Prosecutor, who can then decide to proceed with the filing of a judicial liquidation before the court (Articles 16–18).

Finally, the CCI also introduces a set of rules (Articles 284–292) for the management of the insolvency of groups of companies according to which it is possible to establish a single procedure for different companies of a group, on the basis of a single restructuring plan, maintaining a separation of assets and liabilities.

ii Privacy and data protection

The new EU General Data Protection Regulation (GDPR),6 aimed at unifying the privacy policies of Member States with the purpose of ensuring stronger and broader protection of data, entered into force on 24 May 2016. From 25 May 2018, the GDPR applies directly in all Member States. Legislative Decree No. 101/2018, which entered into force on 19 September 2018, has been adopted to align the national rules to the GDPR.

iii Transfer of title over real estate assets upon default

Law No. 119/2016 introduced Article 48 bis to the Banking Law,7 which provides financial institutions with a more direct, less costly, out-of-court enforcement procedure of guarantees on loans by allowing banks to satisfy their credits over a debtor's real estate by means of a direct transfer of such security to the creditor upon default of the borrower. Such transfer had previously been admitted by Italian courts only with reference to specific transactions, as an exception to the general rule pursuant to Article 2744 of the Civil Code. In particular, this new legal provision admits that loan agreements executed between banks or other financial institutions authorised to issue credit and entrepreneurs may be guaranteed by a registered transfer of title over the debtor's real estate assets, conditioned to the breach of his or her obligations pursuant to the loan agreement, and complies with Italian law principles through the provision of the patto marciano (Article 48 bis Paragraph 2 of the Banking Law). The latter allows a lender, for loans secured by property, to obtain the transfer of such property upon default by the borrower, but requires that the creditor, in the event that the appraised value of a real estate security exceeds the relevant outstanding debt, shall have to correspond to the debtor the difference in value directly in his or her bank account. Under certain conditions, this transfer procedure may also apply if a court enforcement is initiated, and if the debtor undergoes bankruptcy.

iv New security interest over movable assets

As a general rule, Article 2786 of the Civil Code provides that a security interest over movable assets is executed by delivering the relevant asset to the secured creditor, with a few relevant exceptions (such as a pledge over financial instruments pursuant to Legislative Decree No. 170/2004 and the special privilege pursuant to Article 46 of the Banking Law). To render credit transfers more flexible, in line with other jurisdictions, Article 1 of Law Decree No. 59/2016 introduces the possibility for entrepreneurs to grant a pledge over non-registered, movable company assets to creditors without losing the right to trade or use the relevant movable asset. The entrepreneur is expressly allowed to dispose of the secured asset (e.g., by transforming or selling it), and the assets deriving from such use will be subject to the same security interest without having to carry out any formality for the constitution of a new security.

IV FOREIGN INVOLVEMENT IN M&A TRANSACTIONS

With respect to cross-border transactions, inbound deals amounted to 23 per cent of the total value of deals in 2018, whereas outbound deals increased with respect to the previous year, representing 60 per cent of the total value in 2018. The main foreign investors in Italy are still the United States and France, although China has still significantly increased its investments.8

V SIGNIFICANT TRANSACTIONS, KEY TRENDS AND HOT INDUSTRIES

In 2018, the consumer market sector alone represented around one-third of the Italian M&A market in value, instead of financial services, which have suffered a slowdown and represented only 9 per cent of the Italian M&A market in terms of value. This was followed by the support, services and infrastructure sector at 30 per cent, energy and utilities at 7 per cent and industrial markets at 6 per cent.9

Among the most relevant deals of the past year are the following:

  1. in the consumer market sector, Essilor and Luxottica, the world's largest lens and frame manufacturers, successfully completed a €48 billion merger and formed a holding company named EssilorLuxottica. The merger was officially completed after Luxottica's major shareholder, Delfin, contributed its entire 62.42 per cent Luxottica stake to Essilor;
  2. Atlantia SpA, a company operating in the field of infrastructure and mobility networks, indirectly acquired a participation in Abertis equal to 50 per cent by means of the incorporation of Abertis Partecipaciones SA, whose entire share capital is in turn held by a Spanish newco, Abertis HoldCo, 51 per cent of which is owned by Atlantia, 30 per cent by ACS and 19 per cent by Hochtief. Abertis Partecipaciones SA acquired 98.7 per cent of the entire share capital of Abertis for an amount equal to €16.2 billion. In the same transaction, Atlantia also acquired a 23.9 per cent participation in Hochtief through a transfer of shares by ACS for a total value of €2.4 billion;
  3. a consortium of investment funds controlled by CVC Capital Partners acquired the entire share capital of Fimei, the holding company that holds around 51.8 per cent of the Recordati pharmaceutical group, for an amount of around €3 billion;
  4. the American Global Infrastructure Partners fund acquired the entire share capital of Italo-Ntv, the second company operating in the road and infrastructure field on the Italian territory, for around €2 billion; and
  5. in the financial services sector, banking groups continued their strategy to sell and outsource some of their non-core activities: among others, Banca Carige SpA completed the transfer of its majority shares of Creditis Servizi Finanziari SpA to the investment fund Chenavari Investment Managers.10

VI FINANCING OF M&A: MAIN SOURCES AND DEVELOPMENTS

Bank loans still represent an important instrument in M&A financing. In 2018, the stock of non-performing loans was smaller, both as a result of bad loan sales and because fewer defaults occurred. Expansionary monetary conditions contributed to a reduction in funding costs, which fell to very low levels in historical terms.11

The issuance and refinancing of debt have also increasingly grown as means of M&A financing, along with the issuance of straight equity (although this is generally more expensive for the company) and shareholders' loans. The latter are usually subordinated to bank financing.

Recent changes in the above-described rules governing the granting of security, aimed at facilitating the enforcement of mortgages and pledges, might increase the amount of asset-based financing in the near future in connection with M&A transactions.

VII EMPLOYMENT LAW

On 11 August 2018, the Dignity Decree12 was adopted by the recently established government, and was subsequently converted into law and published in the Official Gazette.

The Dignity Decree, inter alia, enacts significant changes concerning fixed-term employment contracts aimed at reducing the precariousness of workers under such contracts. These changes are pursued through several innovations, including:

  1. a reduction of the duration of such contracts;
  2. the introduction of a requirement to justify the reasons for entering into fixed-term contracts;
  3. a reduction in the number of permitted extensions of such contracts;
  4. an increase in the contributions payable by employers in connection with each contract renewal; and
  5. a new cap for temporary agency workers in terms of percentage.

In particular, a fixed-term contract can be entered into without a justifying reason only if its duration does not exceed 12 months. In the case of a longer duration (as well as in the case of renewal for an overall duration of more than 12 months), a justifying reason is always required.

The reasons for an employer to enter into a fixed-term contract must be as follows:

a to meet temporary and objective needs beyond a business's ordinary activity;

  • to meet a need to temporarily replace other workers; or
  • to meet a need related to temporary, significant and non-programmable increases in ordinary activities.

In the absence of valid reasons justifying a fixed-term contract exceeding 12 months (or in the case of renewal an overall duration exceeding 12 months), the employment will be automatically converted into an open-term employment starting from the expiry of the first 12 months.

The overall duration of a fixed-term employment contract cannot exceed 24 months, including all extensions, with the exclusion of seasonal employment contracts and possible longer durations set forth by the applicable collective labour agreements.

The maximum number of permitted extensions is four; in the event of a fifth extension, an employment contract is immediately and automatically converted into an open-term contract, irrespective of the overall duration of the employment.

Staff leasing is governed by the same rules applicable to fixed-term contracts. To the exclusion of certain specific categories, the total number of temporary agency workers and fixed-term employees cannot exceed 30 per cent of the number of open-term employees as of 1 January of the year in which each worker is hired, unless collective labour agreements set forth otherwise.

As to the increase in social contributions, upon each renewal of a fixed-term employment contract, a 0.5 per cent increase becomes due by the employer, in addition to the standard contribution, for the entire duration of the renewal.

VIII TAX LAW

i Asset deals and mergers

In terms of tax implications, asset deals are generally characterised by:

  1. direct taxation on the seller's capital gain (i.e., the difference between the sale price and the fiscal cost of a business). If the seller is a joint-stock company or limited liability company, the capital gain is subject to corporate income tax, with the application of the 24 per cent tax rate;
  2. exclusion from indirect taxation (no application of VAT); and
  3. application of stamp or registration duties in proportion to the value of the business.

Contributions of going concerns, mergers and demergers allow for a step-up in the tax basis of the target's underlying assets13 and goodwill14 through the payment of a sum ranging from 12 to 16 per cent, thus reducing the taxable income by means of deductions and depreciations.

The buyer of a going concern, pursuant to Article 14 of Legislative Decree No. 472/1997, is jointly and severally liable, with the seller, for the tax liabilities concerning the transferred assets. However, these liabilities (due taxes and penalties) are limited to:

  1. the value of the assets;
  2. those relating to the two fiscal years prior to the year of transfer and the year of transfer itself; and
  3. those audited in the two fiscal years prior to the year of the transfer or in the year of the transfer itself, even if the liabilities relate to previous years.

These limitations do not apply in cases of tax fraud.

Furthermore, a buyer's liabilities may be further limited by the issuance of a tax certificate by the Tax Authority prior to the closing of the transaction.

Article 1, Paragraph 87 of Law No. 205/2017 amended Articles 20 and 53 bis of the Consolidated Stamp Duty Act)15 with the intent of clarifying that deeds to be registered are not to be requalified on the basis of the overall economic effects achieved within a framework of several connected deeds. The new Article 20 provides that, for the purposes of correctly applying the stamp duty, the registered deed has to be interpreted by exclusively considering the deed in itself, without taking into account any external element such as, for example, connected deeds or other elements beyond the text of the deed at issue.

For example, deeds concerning a contribution of a going concern followed by a sale of the shares of the transferee company are not to be requalified as asset deals. Law No. 205/2017 also amended Article 53 bis of the Consolidated Stamp Duty Act in terms of enhancement of the powers of the Financial Administration with reference to the abuse of stamp, mortgage and cadastral duties.

ii Share and quota deals

Share and quota deals are instead characterised by:

  1. the participation exemption, applicable subject to certain conditions,16 with reference to 95 per cent of the capital gain obtained by the sale by joint-stock companies or limited liability companies (or less);
  2. the application of a flat rate registration duty; or
  3. a VAT tax exemption.

However, if a deal concerns the shares of a joint-stock company resident in Italy, a Tobin tax of 0.2 per cent applies, with the exception of shares of listed companies whose average market capitalisation in November of the year prior to the transfer was less than €500 million.17

iii Newco share deals

The M&A structure by which the seller constitutes a newco to which he or she transfers, by means of a contribution in kind, a business, with the subsequent transfer of the shares or quotas of the newco to a buyer, is expressly admitted by Article 176 Paragraph 3 of Presidential Decree No. 917/1986 and is qualified as non-elusive of direct taxes. As for indirect taxes (VAT, register, or both), recent case law has confirmed the non-elusive effects.18

IX COMPETITION LAW

Except in specific circumstances, under Law No. 287 of 10 October 1990 (Law), the filing of a request for the clearing of a concentration (e.g., a merger, a joint venture or an acquisition of control over another company) before the IAA is mandatory when two cumulative turnover thresholds are met. Said thresholds were recently modified by the Yearly Competition Act19 and subsequently updated. As a result of these changes, Section 16(1) of the Law requires prior notification of all M&A involving undertakings whose aggregate turnover in Italy exceeds €498 million, and where the aggregate domestic turnover of each of at least two of the undertakings concerned exceeds €30 million.

Concerning the above-mentioned requirements, prior to the reform of January 2013, the turnover thresholds were alternative rather than cumulative. As a result, the number of concentrations assessed by the IAA dropped considerably (only 73 in 2018). In 2018, out of 730 concentrations the IAA opened proceedings only in six cases. In addition, the reform also abolished the filing fees to be paid upon the filing of a transaction and replaced them with an annual tax on the turnover of all corporations based in Italy. However, the revision of the turnover thresholds by the Yearly Competition Act was precisely aimed at broadening the scope of merger control by the IAA, with particular reference to joint ventures and acquisitions of joint control over targets with a low turnover.

The filing of a transaction must precede execution. The IAA may also consider receivable notifications that concern non-binding agreements insofar as they are supported by solid documentary evidence. It would therefore be possible to notify a concentration on the basis of a memorandum of understanding or preliminary agreement. The deadline for the notification is the closing of an operation.

Contrary to what occurs under Regulation (EC) 139/2004, Italian merger control law does not impose an automatic standstill obligation on parties. Therefore, in theory it would be possible to realise a concentration after filing but before authorisation, while accepting the risk of a de-concentration order from the Authority. However, the absence of an automatic standstill obligation does not exclude the possibility that the IAA will directly require the parties to suspend their concentration following a specific decision.20 With the aim of facilitating the evaluation of an assessment by the IAA and reducing risks that could delay the duration of the procedure, the IAA suggests a discussion of possible issues related to an operation even before notification of a concentration (pre-notification phase).

Once a request for the clearance of a transaction is filed before the IAA, the procedure continues in two distinct phases, a first (necessary) step and a second (possible) step. The first step begins with the filing and shall end within 30 days. At the end of this phase, the IAA may decide to clear the transaction, or to initiate a more in-depth investigation in the event that it considers that an operation is likely to be prohibited. The delay is suspended if the parties communicate inaccurate or false information and will begin again only from the reception of additional information (stop the clock). For the same reason, the IAA may decide to postpone the opening of a second phase beyond the delay of 30 days. The second step begins with the IAA notifying parties of a decision to initiate proceedings. This second phase has a 45-day duration and can be extended only once for a maximum duration of a further 30 days.

The IAA may authorise a concentration subject to commitments undertaken by the parties to address its concerns. Contrary to procedures before the European Commission, these commitments may be both proposed by the parties and prescribed directly by the Authority. In any event, commitments are generally available only in the second phase of the procedure, this being another difference from the procedure applied under Regulation (EC) 139/2004.

X OUTLOOK

In the first quarter of 2019, the number of transactions slightly decreased with a total value of €4.2 billion, thus highlighting a slowdown compared to the value seen in the first quarter of 2018. However, there are some interesting transactions envisaged that will be completed in 2019, among which are the sale of Magneti Marelli to the KKR Fund for €6.2 billion, the sale of Generali Leben (part of the Generali Group) and the announcement of the Nexi SpA initial public offering for an equity value of €6.2 billion.21


Footnotes

1 Mario Santa Maria and Carlo Scaglioni are corporate partners at Greenberg Traurig Santa Maria Law Firm. The authors would like to acknowledge the contributions of fellow partner Edoardo Gambaro, senior associates Alessandra Boffa, Caterina Napoli and Elisabetta Nicolì and associate Pietro Missanelli.

2 According to the 2018 M&A presentation 'Il mercato M&A in Italia: trend e prospettive', with the cooperation of KPMG and Fineurop Soditic, and sponsored, among others, by Università Commerciale Luigi Bocconi and the Italian Private Equity Venture Capital and Private Debt Association (AIFI).

3 Italian Securities Act (Legislative Decree No. 58/1998).

4 Italian Supreme Court decision No. 16963/2014.

5 If a merger is carried out by incorporation in a company that is totally owned (or 90 per cent owned) by the other merging company, the procedure may be simplified with the omission of some of the above-mentioned documents.

6 EU General Data Protection Regulation No. 2016/679.

7 The Banking Law, Law Decree No. 385/1993.

8 According to the recent 2018 M&A presentation 'Il mercato M&A in Italia: trend e prospettive', with the cooperation of KPMG and Fineurop Soditic and sponsored, among others, by Università Commerciale Luigi Bocconi and AIFI. See also Thomson Reuters 'Mergers & Acquisitions Review, Full Year 2018', Thomson Reuters, 'Mergers & Acquisitions Review, First Quarter 2019', Thomson Reuters, 'Mid-market M&A Review, First Quarter 2019' and Thomson Reuters, 'Small Cap M&A Review, First Quarter 2019'.

9 According to the recent 2018 M&A presentation 'Il mercato M&A in Italia: trend e prospettive', with the cooperation of KPMG and Fineurop Soditic, and sponsored, among others, by Università Commerciale Luigi Bocconi and AIFI.

10 Santa Maria Law Firm assisted the purchasers in both transactions.

11 See Bank of Italy's Annual Report dated 31 May 2019.

12 Dignity Decree No. 87 of 12 July 2018.

13 See Law No. 244/2007.

14 See Law Decree No. 185/2008.

15 The Consolidated Stamp Duty Act, Presidential Decree No. 131/1986.

16 The conditions of the application of the participation exemption are the participation has been owned continuously for at least 12 months prior to the sale; the participations were classified as financial fixed assets in the financial statements relating to the first tax period of uninterrupted ownership; the subsidiary company is resident for tax purposes in a white list country; and the subsidiary is actually carrying out a business activity.

17 See Law No. 228/2012 Paragraphs 491 et seq.

18 Italian Supreme Court decision No. 2054/2017.

19 The Yearly Competition Act, Law No. 124/2017.

20 Note that the scope of the obligations arising from interim covenants, which are concluded by the merging parties to regulate their relationship during the period from the signing to the closing, are currently under the scrutiny of the European Court of Justice in case C-633/16, Ernst & Young.

21 According to the recent 2018 M&A presentation 'Il mercato M&A in Italia: trend e prospettive', with the cooperation of KPMG and Fineurop Soditic, and sponsored, among others, by Università Commerciale Luigi Bocconi and AIFI.