Bologna, Italy

Development of the Italian M&A market in the time of COVID-19

By Dr Antonio Zecchino, Cavour Corporate Finance

The pandemic not only had a major impact on our social lives, but also on the M&A market. We have conducted an analysis of the M&A market in Italy in 2020, and in this article we share some interesting results and provide an outlook for 2021.

The Italian M&A market in 2020

In 2020 the Italian market faced a downturn of 31% (in EUR billion) and 20% (number of deals) compared to 2019. In the first semester of 2020 there was a significant slowdown in M&A activity as a result of the lockdown, and extreme uncertainty about the outlook for economic recovery. In the second semester, there was a resumption of M&A activity.

Financial and industrial investors demonstrated a strong interest in resilient businesses with solid and clearly defined business plans, as well as in vertical integration deals.


italian ma market

The outlook for family-run business in 2021 and upcoming years

  • Financial and industrial investors still demonstrate high interest in M&A, but M&A transactions generally are expected to take a longer time to conclude and will become more complex.
  • Selling and merger processes place a greater emphasis on well-defined objectives, and the preselection of potential partners is a critical aspect to a deal’s success.
  • A solid and detailed business plan is essential for M&A deals. Investors must be more selective, focused and demanding.
  • Rigid sale and merger processes don’t work anymore. Flexibility and a tailor-made approach is needed.
  • Previously, there was much convergence on the valuation criteria. Nowadays, there is more asymmetry between bidders and sellers in terms of valuation. The key issues are:

i. How many years should be considered to define normalised and sustainable profitability?

ii. Increasing use of adjustment tools in order to determine transaction value is important. This includes: earn-out, reverse earnout, ratchet clause, dividend policy, etc.

iii. A well-defined contract structure, governance, more articulated SPA and SHA requirements, and the use of hybrid instruments are all crucial factors to successfully closing a deal.

  • Private equity funds are becoming more interested in:

i. Minority share transactions;

ii. Resilient sectors and targets;

iii. Buy & build strategy.

Macroeconomic conditions influence the M&A market. For a strong and rapid recovery no other exogenous shocks must happen. Further macroeconomic factors that influence the M&A market are listed in the full report, which you can read here.

Dr Antonio Zecchino

Dr Antonio Zecchino

GGI member firm
Cavour Corporate Finance
Advisory, Corporate Finance, M&A
Bologna, Italy
T: +39 051 226623
E: This email address is being protected from spambots. You need JavaScript enabled to view it.

Cavour Corporate Finance (Cavour) is an M&A boutique firm which offers tailormade advisory services to satisfy every need in corporate finance transactions with a strong focus on client care. Cavour is a local partner, specialising in crossborder transactions with a customised approach and local competences.

Dr Antonio Zecchino joined Cavour Finanziaria in 1990 and in 1996, established Cavour Corporate Finance, of which he is Chairman and major shareholder. He has specific experience in domestic and cross-border M&A transactions, PEG activity, strategic and financial advisory, and has closed over 50 M&A deals.

Published: M & A Newsletter, No. 01 Autumn 2021 l Photo: Ekaterina Belova -

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