Momentum appears to be building in Italy’s deal market. Total M&A value recorded in the first three quarters of the year stands well ahead of the same point in 2024, with the banking, industrials and consumer sectors driving activity.
This robust performance takes place as part of a comeback of the Italian economy. While unemployment, particularly among the country’s youth, remains high and the IMF forecasts that Italy's GDP will grow by just 0.5 percent this year and by 0.8 percent in 2026—compared to 1.2 percent and 1.1 percent, respectively, for the eurozone as a whole—Prime Minister Giorgia Meloni’s government has successfully contained the country’s public deficit and Italy is delivering a relative economic rebound.
A show of strength
Despite certain economic headwinds, M&A in the eurozone’s third largest economy has been resolute. A total of 828 deals valued at US$55.9 billion changed hands during the first three quarters of 2025—a 13 percent increase in value year over year. Deal volume, meanwhile, registered a decrease over the same time frame, aligned with the global trend of fewer, but larger deals. At the time of writing (November 19), value had risen to US$62.8 billion, surpassing the full year total for 2024 (US$62.3 billion).
Overall, consolidation within Italy’s fragmented banking sector has been the key catalyst fueling the uptick in value. Monte dei Paschi di Siena’s US$18.7 billion acquisition of rival and specialty bank Mediobanca marks the largest deal of the year so far. Other significant transactions include BPER Banca’s US$4 billion takeover bid for Banca Popolare di Sondrio, as it looks to strengthen its position among Italy’s top-tier lenders, and Banca Ifis’ acquisition of Illimity Bank. Due in large part to these deals, financial services has recorded the highest deal value across all sectors in 2025 so far. A total of US$21.6 billion has been spent in total, the highest annual value in the sector since 2007.
The industrials sector has been the busiest in terms of deal volume. Consolidation within the automotive sector is a key driver of activity, as seen in Tata Motors’ purchase of Italian truck manufacturer Iveco. The US$4.5 billion deal, which marks the first takeover of a European original equipment manufacturer by an Asian group, has been viewed as a defining moment for Europe’s commercial vehicle sector. The Tata-Iveco tie-up will place it second only to Daimler Truck in terms of global market share, excluding China.
The consumer sector is also generating a healthy pipeline of deals, fueled by Italy’s reputation for high-quality products and luxury brands. Valued at US$1.4 billion, Prada’s purchase of rival luxury brand Versace marks the largest consumer deal of the year. The acquisition will create a multibillion-dollar luxury fashion group able to compete with rival fashion conglomerates such as Kering and LVMH.
Meanwhile, international PE players continue to actively seek out targets in the Italian market. In the first three quarters of the year, PE buyout activity slowed slightly compared to 2024. At the time of writing (November 19), however, total buyout value stood at US$16.1 billion, only 4.7 percent down on the whole of 2024.
Despite PE’s value dip in Q1-Q3, there were several standout deals announced in the high-growth infrastructure and energy sectors, including French PE firm Ardian and Italian asset manager Finint Infrastrutture’s US$2.3 billion acquisition of the Venice airport operator, Save S.p.A, in mid-October, and Eni’s sale of a 20 percent stake in its renewable energy and retail arm, Plenitude, to US investment firm Ares Management. The latter deal, valued at US$2.3 billion, comes as the energy giant seeks out strategic partners to grow its clean energy operations.
However, the largest PE transaction to date this year is tied to the climate ambitions of US investment firm Sixth Street, which purchased a 38 percent stake in Sorgenia for US$4.6 billion. The investment in the renewables company, which boasts a portfolio spanning solar, wind, biomass and hydroelectric plants, will help strengthen Sorgenia’s position as a leading energy infrastructure platform in Europe.
Consolidation, succession and privatization
Further banking consolidation is expected to drive M&A over the near term. A greater sense of political stability, along with rising interest rates and a €300 billion (US$347 billion) bad loan clean-up, have propelled lenders’ profits to record highs. A buoyant market environment has produced a number of high-profile takeover bids over the past year as lenders look to compete with Wall Street giants. These include UniCredit’s US$17.5 billion bid for Banco BPM and Mediobanca’s €7 billion (US$8.1 billion) bid for Banca Generali. While neither deal ultimately crossed the finish line, supportive market conditions and cash-flush banks mean more deals are likely to follow.
Succession issues look set to be another driver of Italian dealmaking, with a wave of generational handovers fueling activity. SMEs under family ownership are the engine of Italy’s economy, accounting for around 85 percent of all businesses in the country. Slow growth within the domestic economy, a struggling manufacturing sector and geopolitical uncertainty are pushing SMEs to secure capital from external sources. In certain cases, innovative legal structuring allows some families to continue to run their companies while selling a large minority stake, and some PE firms have recently shown a willingness to purchase a minority stake in SMEs.
Geopolitical and economic uncertainty, which have led to longer deal timelines as investors seek clarity on forecasts, have increased the popularity of public-to-private deals. This deal type is increasingly being viewed as a secure way to deploy capital in a volatile geopolitical environment.
Challenges on the horizon
Geopolitical uncertainty will continue to weigh on dealmakers’ minds going forward. Italy’s export-oriented economy is particularly susceptible to changes in the US government’s tariff policy. The recently renegotiated 15 percent tariff on most US imports from the EU will impact “Made in Italy” brands, especially those in the food, wine and fashion sectors.
Company valuations also look set to suffer due to new US tariff policies. This will be particularly damaging to Italy’s SME market, as smaller businesses contribute an estimated 53 percent to the nation’s exports, compared to a European average of 40 percent. Ongoing uncertainty surrounding the enforcement of tariffs will not only limit profitability but could also deter investment and expansion plans.
These additional tariffs are on top of those imposed under US antidumping authorities, which affect certain Italian family-owned food brands. For example, in September the US Department of Commerce preliminarily calculated a 92 percent tariff under the longstanding antidumping duty order on pasta from Italy. If this new rate comes into effect next year, it would be a significant blow to Italy’s family-owned pasta industry, which exported an estimated €700 million (US$806 million) worth of pasta to the US last year. Once again, this could limit growth plans and discourage potential investors.
Outlook
Italy’s M&A outlook appears bright. The domestic banking consolidation drive looks set to deliver a steady flow of deals over the coming years, while international interest in the industrials sector, particularly automotive firms, remains strong. The country’s reputation for high-quality products and luxury brands will continue to attract investor interest both from home and abroad.
An uncertain geopolitical picture could yet slow the Italian M&A train. The future of Italy’s SMEs—the engine of Italian business—is a particular cause for attention, with recent tariff increases most keenly felt by “Made in Italy” brands. This could dampen dealmaking moving forward as businesses switch to a defensive mode. On the flip side, however, more favorable valuations could create opportunities on which both strategic buyers and PE houses could capitalize.