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Italy is the fourth most interesting market for German family-owned companies

by Alessandro Merli

Italy continues to gain ground in merger and acquisition transactions of family-owned German companies, according to the annual report by the law and professional services firm Roedl & Partner. The survey sees Italy in fourth place, behind Germany, the US and Poland, both in terms of the transactions under way and those expected in the next twelve months. In the first case, the Italian market is indicated by 16% of the respondents, in the second by 13%.

“In the last couple of years,” says Stefan Brandes, a Managing Partner at Roedl & Partner, specialist in M&A consultancy in Italy and one of the authors of the report, “Italy is once again one of the most interesting markets for Germany’s family-owned companies. The reasons are several: there is the perception of greater political stability; the economy is showing signs of a recovery; lastly, the sectors in which the German companies of this type are the most active in mergers and acquisitions are automotive and mechanics. In these sectors of the manufacturing industry, Germany and Italy are the two strongest countries, and it is logical that the search for a partner takes place between these two economies.”

Brandes also notes that there is growing interest by Italian companies looking for acquisitions in Germany. This issue was not, however, the object of the survey, carried out thanks to the collaboration of several institutions, including Hypovereinsbank, the German subsidiary of the UniCredit group.

Apart from Germany itself, the only large European market showing a good performance is Italy, which remains the dominant goal of the family-owned German companies, many of which are medium in size and hope to expand their global presence through the M&A.

France, the report notes, has experienced a decline not only as a sales partner with Germany (in 2015 it was ousted from the top spot by the US), but also in interest for M&As. Great Britain had slipped to the rear even before the pro-Brexit referendum. The German family companies, like everyone, observes Brandes, are waiting to see the developments of the negotiations regarding Brexit in the next two years.

Even if the controversies against the monetary policy by the European Central Bank under President Mario Draghi are strong in Germany, the survey notes that, as do periodic surveys by IFO on credit, the family-owned companies easily obtain financing with extremely favorable conditions for their M&A transactions, thanks also to a solidity that allows them, at least in part, to self-finance the acquisitions.