The value of the Italian M&A market stands at 39.7 billion euros in the first half of 2024, marking an increase of 177% compared to the 14.3 billion recorded in the first half of 2023. This is what emerges from the report by the Italian law firm Gatti Pavesi Bianchi Ludovici (GPBL) and Mergermarket.
Geopolitical uncertainty slows M&A deals
M&A deal volume declined in the first half of 2024, recording 565 transactions, a 9% decline compared to the same period last year. This decline, the report explains, reflects the European trend, where difficult financing conditions and geopolitical uncertainty have slowed M&A activity across the region.
Barbara Napolitano, equity partner at Gatti Pavesi Bianchi Ludovici, commented: “Buyers have responded to uncertainty by becoming more selective, seeking high-value deals driven by strong strategic motivations, while mid-market activity has leveled off.”
Sector numbers
The Chemicals & Industrials (I&C), Telecommunications, Media & Technology (TMT), and Consumer sectors recorded impressive numbers. I&C accounted for a quarter of total deal volume in 2023-2024, the highest among all sectors. TMT generated the highest proportion of deal value in the same period, with a considerable share of 35%. The Consumer sector saw deals worth a total of €4.4 billion in H1 2024, marking a 61% increase compared to the first six months of 2023. This result was driven by the acquisition by US private equity firm L Catterton of a majority stake in the cosmetics brand “Kiko Milano”. Valued at €1.4 billion, this transaction highlights the international appeal for one of the largest Italian cosmetics brands.
Private Equity
The market of the private equity (PE) in Italy remained stable in the first half of the year, despite the difficult conditions in the debt market. Driven by international investors, the value of private equity deals has recorded a 65% increase compared to the first six months of 2023, reaching €12.8 billion. The volume of transactions, on the other hand, slowed down, in line with the European trend, going from 123 to 113 in the same period.
“The resilience of the Italian PE market is largely due to its enduring appeal for international investors. Italian companies – which most of the time represent excellence in their respective sectors of reference at an international level – continue to be the object of great interest from financial sponsors always looking for investment targets that combine relatively favorable valuations with high growth potential,” said Gianni Martoglia, equity partner at Gatti Pavesi Bianchi Ludovici.
Looking ahead, the volatile global macroeconomic and geopolitical environment makes it difficult to predict future trends in the M&A market. However, as operators assess the remaining six months of the year, they can count on a few certainties: Italian industry will continue to attract international interest; PE players have a large amount of capital to invest; and interest rates are finally falling. These factors will continue to influence the market in the next six months and beyond.
