Cross-Border M&A: How to Do Deals in Italy

Lessons Learned from Cross-Border Deals

M.S.: When you start your career and lack on-the-ground experience, you often have a more romantic idea of the work. The focus is mainly on the technical aspects—on legal drafting. The priority becomes preparing the best legal document possible.

In doing so, it is easy to underestimate the importance of negotiation strategy. You may not fully consider what kind of buyer you are advising, what kind of Italian seller you are dealing with, what the sensitivities of both parties are, and how to better accommodate them.

This is something that is difficult to understand at the beginning of a career. It becomes clearer over time, through experience and the mistakes made along the way.

What was missing at the beginning was the relationship skill—the ability to better approach the counterparty—and the ability to educate the client in setting up the right strategy to succeed vis-à-vis that specific counterparty.

D.R.: I agree with Mauro, but specifically in cross-border deals, there is something that is rarely emphasized at the beginning of a career: the importance of communication.

In cross-border transactions, you are dealing with people who are not familiar with your legal framework, and you may not be fully familiar with their culture. That makes communication absolutely critical. It should be prioritized even more than drafting sessions or technical aspects.

Clear communication reassures clients that the deal is progressing well, that they are prepared, and that they are always on top of what is happening.

If starting again, communication is what I would focus on the most.

Golden Power Regulations

D.R.: Italy introduced what is commonly referred to as the “Golden Power” regime in 2012. The term itself is used in English, even in Italy. Initially, it applied only to specific sectors and granted the Italian government the authority to review transactions involving Italian companies carrying out strategic activities or holding assets of strategic relevance in sectors deemed critical for the country.

At the outset, there was limited focus on this legislation. It mainly covered narrow sectors such as defense and other highly specific industries. However, over the past five years—particularly after COVID—new legislation has been introduced almost every year, significantly expanding the scope of Golden Power control.

The regime has broadened to cover intragroup transactions and additional sectors, including energy, cybersecurity, aerospace, semiconductors, quantum technologies, nuclear energy storage, and food production technologies. Initially, it applied only to non-Italian, non-EU investors. Today, it may also apply to Italian and EU persons, depending on the sector in which the target operates.

Most recently, in January, a new amendment extended the framework to the financial sector. This introduced additional scrutiny for transactions that could pose a threat to Italy’s national economic and financial security.

The Italian government adjusted the framework in response to concerns raised by the European Union. Two key clarifications were introduced. First, Golden Power authorization is required only where there is no existing strict sector-specific regulation already safeguarding national interests. Second, the timeline for Golden Power clearance has been aligned with EU merger control procedures. The 45-day review period under the Golden Power rules begins only after clearance from the European Commission, where applicable.

In practice, this means that parties may need to obtain EU merger control clearance before proceeding with the Italian Golden Power review—effectively layering FDI and antitrust approvals in cross-border transactions.

Golden Power vs. Anti-Trust

M.S.: I would say it is slightly different. Antitrust regulation is mainly focused on avoiding concentration and monopolistic behavior by large conglomerates.

The purpose behind the foreign direct investment rules, including the Golden Power regime, was different. The government’s intention was to protect Italian companies—particularly those operating in strategic sectors—from becoming easy targets for international buyers. When referring to international buyers, this primarily means non-EU countries, although the framework can also apply to buyers within the European Union.

In practice, however, the Golden Power scheme has been applied quite broadly. A significant number of transactions require prior authorization, making it difficult—at least on paper—to complete a deal without first obtaining government clearance. This has given the government a more invasive level of control over M&A activity, including intragroup restructurings.

For example, if a large Italian company intends to reorganize and transfer strategic assets outside of Italy, even within its own group, it may still need to obtain clearance under the Golden Power rules.

The underlying objective of the framework is understandable and, in principle, reasonable. However, the implementation has been strict, with numerous rules and procedural requirements.

That said, it is also fair to note that the government has not frequently exercised its power to block transactions outright. While the authority exists, outright prohibitions have been relatively limited in practice.

D.R.: I think this also reflects the geopolitical shifts that occurred after COVID. The first time the Italian government used its Golden Power authority in a particularly invasive way was in 2022, when it ruled on a transaction that had actually taken place in 2018.

In that case, an Italian company manufacturing drones had sold a 75% stake to a Hong Kong company owned by a Chinese conglomerate. The Italian government intervened and ordered the transaction to be unwound. The shares were transferred back to the original Italian seller on the grounds that the parties had not complied with the Golden Power regulatory framework.

This intervention was significant and, in many ways, aligned with broader geopolitical developments. Chinese investors, who had previously been welcomed in certain sectors, were no longer viewed in the same light. The increased scrutiny reflected a broader shift in how strategic assets and foreign investments were being assessed in the post-COVID geopolitical environment.

Buying Businesses in Italy

D.R.: From a procedural standpoint, the parties must notify the Italian government—specifically the office of the Prime Minister—of their intention to carry out the transaction.

Once the notification is filed, there is a 45-day review period during which the government may respond. In practice, a response is typically provided. If no response is issued within that timeframe, the parties may proceed. However, it is common for the government to formally reply.

Given that the rules are intentionally drafted in relatively broad terms, there is not always complete certainty as to whether the regulation applies to a specific transaction. The government’s response usually clarifies one of two outcomes: either the regulation does not apply, or it does apply but the transaction is cleared.

Accordingly, parties should be prepared to file the notification as part of the deal process. While the filing is not overly burdensome, it is also not entirely straightforward. It should be included in the transaction checklist alongside other regulatory considerations, such as potential merger control clearance.

M.S.: When a client approaches us—often at the due diligence stage—we immediately assess the nature of the target’s business. Alongside financial and legal diligence, we conduct a regulatory and compliance analysis to determine which authorizations may be required.

If the target operates in a sector that may trigger a Golden Power filing, we begin working on the issue at the earliest stage of negotiations, often in parallel with due diligence. The objective is to assess how critical the risk may be, evaluate the likelihood of clearance versus potential blockage, and consider what remedies the government might impose as a condition for approval.

From a transactional standpoint, we then ensure that the share purchase agreement includes a specific condition precedent making closing subject to the receipt of the required authorization.

Technically, the law allows for notification within a limited period—approximately ten days—after the acquisition of shares. However, filing post-closing would be highly risky and imprudent for a buyer. For this reason, Golden Power clearance is structured as a pre-closing requirement and treated as a mandatory condition precedent to completing the transaction.

In addition to the Golden Power review, there is often the requirement to obtain approval from the European Commission under merger control rules.

Merger control clearance is generally a prerequisite to closing. In most cases, shares cannot be acquired before obtaining antitrust approval.

To manage the timeline efficiently, the two processes are handled in parallel. The necessary documentation for both filings is prepared simultaneously. Typically, the merger control filing is submitted first, followed by the Golden Power notification.

However, closing does not occur until all required authorizations have been obtained. Only once both merger control clearance and Golden Power approval are secured do the parties proceed to complete the acquisition.

If a buyer’s interests are perceived to conflict with national security or broader national interests, the transaction is likely to face heightened scrutiny.

For example, 5G infrastructure in the telecommunications sector is considered highly sensitive. Operators in this space have access to significant volumes of data, including personal data of the Italian population. In such cases, the government will exercise extreme caution before granting approval.

Where strategic assets and sensitive data are involved, clearance cannot be taken for granted, and the review process is approached with particular rigor.

Buying Businesses from other Countries

M.S.: This is a very interesting question because buyer behavior varies significantly across regions, and those differences materially affect cross-border negotiations.

If we start with Japan, Japanese investors tend to move slowly. They place strong emphasis on internal alignment and relationship-building before entering into detailed negotiations. Numerous meetings are held, and trust must be established as a prerequisite to progressing the transaction.

This approach is closely tied to their decision-making structure. Consensus is typically built from the bottom up, with multiple stakeholders involved in the review process. Extensive internal reporting is required, and a broad group participates in the final decision. While this process takes time, once a Japanese company decides to proceed, it is generally reliable. The likelihood of the decision being reversed is relatively low.

Korean buyers present a different dynamic. They may initially appear highly enthusiastic and eager to move quickly. However, the process can be discontinuous. After a strong start, there may be periods of silence, creating uncertainty for the seller. This often relates to internal budget cycles and fiscal constraints. For example, if there is remaining budget toward the end of a fiscal year, the process may suddenly accelerate to justify departmental spending.

In addition, although operational teams conduct site visits and engage actively in discussions, the final decision is typically made by senior leadership, such as a founder or chairperson. For foreign counterparts, it can be difficult to determine who truly holds decision-making authority. Hierarchy is critical, and misunderstanding this can complicate negotiations.

UK buyers tend to be structured and formal. They are generally faster than Japanese or Korean investors but still disciplined in their process. Verbal understandings are insufficient; agreements must be documented, first through a letter of intent and ultimately through definitive agreements. This approach often strikes a balance between relationship-building and procedural certainty.

US buyers, by contrast, are often very fast and business-driven. Delegations traveling to negotiate typically have full decision-making authority and can bind the company in real time. However, speed can sometimes come at the expense of deeper analysis. There may be a greater willingness to address certain risks later, during post-merger integration, rather than resolving every issue upfront.

Understanding these cultural and structural differences is essential in cross-border M&A. Timeline expectations, negotiation style, internal governance, and decision-making authority all directly impact the probability of closing a deal successfully.

U.S Buyers in Italy

D.R.: I would not say that American investors consistently get it wrong. On the contrary, in my experience, US investors perform very well in Italy. Most transactions involving American buyers tend to be satisfactory for both parties. There is a significant volume of US investment in Italy, and the relationship between the two countries in terms of trade and investment is generally strong and successful.

That said, as in any cross-border deal, cultural differences inevitably arise.

One key area where US investors must be properly advised—early in the process—is employment law. Italian labor regulations are far stricter than in the United States. Layoffs follow formal procedures, and terminating employees is considerably more complex. This can materially affect post-acquisition restructuring plans.

A second issue relates to management presence. Particularly when the Italian target is a smaller company within a larger group, some US investors assume the business can be managed remotely from the US, the UK, or Ireland. In practice, this is often unrealistic. While it is not mandatory to appoint an Italian board member, having a local presence—or at least someone who regularly travels to Italy—is critical. Ongoing interaction with suppliers, customers, and local authorities requires proximity and relationship management.

Finally, there is the cultural dimension, especially in founder-led businesses. Italy has a large number of highly productive medium-sized enterprises, particularly in the northern regions. Many of these companies are still closely tied to their founders, whose presence is central to the company’s identity and culture.

Understanding how to work with these individuals is essential, especially when acquiring a minority stake or structuring a gradual transition. Equally important is preparing for the future—when the founder may step back—and ensuring that relationships with employees and management remain stable.

In summary, while US investors are generally successful in Italy, particular attention must be paid to employment regulation, local management presence, and the cultural role of founders.

Speed of US buyers

M.S.: In some cases, the approach adopted by foreign buyers—particularly from an Italian perspective—can appear overly aggressive. The mindset may be: we arrive, we pay, we acquire the company, and from the day after closing, the business is fully under our control.

This attitude can emerge regardless of whether the buyer has acquired 100% or only a controlling stake. There is sometimes an ambition to step in immediately and assume a deep understanding of the business, even greater than that of the local management. In practice, this is not always realistic—especially in businesses built on long-standing relationships with local customers.

Those relationships are often maintained by the existing management team, and in many Italian companies, that management team includes the founders themselves. Removing or marginalizing them too quickly—without investing in continuity—can create operational and commercial difficulties after closing. The consequences are sometimes recognized only when it is too late.

For this reason, it is critical to establish a well-structured governance framework from the outset. This is particularly important when sellers retain a minority stake or when former managers remain as directors or key employees. Clear rules and balanced governance mechanisms help both sides align around a shared objective: ensuring that the acquired company performs successfully over the long term.

Of course, there are situations where the process is more straightforward. For example, when sellers—such as private equity funds—are motivated to exit, and a US buyer offers an attractive price, alignment can be achieved quickly. They often share a similar transactional mindset, communicate effectively, and the deal proceeds smoothly.

However, this dynamic does not always apply to small and medium-sized Italian companies. In those cases, the transaction is often not purely financial. Personal, cultural, and legacy considerations may carry as much weight as valuation. As a result, achieving alignment can require a more nuanced approach than in a typical institutional exit.

Deal Flow in Italy

M.S.:  Italy has consistently been regarded as an attractive jurisdiction for foreign investment, including by US buyers. Whether driven by private equity or strategic investors, the country has continued to see a steady flow of transactions.

Even during periods of economic stress—such as around the pandemic—M&A activity remained active. In 2020, there was a temporary slowdown in private equity investments, accompanied by an increase in distressed M&A transactions. However, the private equity market recovered quickly thereafter, leading to a renewed wave of deal activity. In recent years, both the volume and overall value of transactions have increased.

While Italy may not regularly generate the multi-billion-dollar transactions commonly seen in the United States, the market remains dynamic and strategically important. Several high-profile and significant transactions have been completed, particularly involving well-established Italian targets.

Among private equity investors, major global funds such as KKR and Blackstone continue to be highly active in Italy. By their nature, these firms typically focus on large-cap opportunities, reinforcing Italy’s position as a relevant and competitive M&A market within Europe.

Deal Sourcing in Italy

M.S.: Over the years, deal sourcing in Italy has evolved significantly.

When I began my career, large investment banks were the primary drivers of deal origination. Institutions such as Goldman Sachs, Merrill Lynch, Lehman Brothers, and JPMorgan played a central role in matching buyers and sellers.

For sellers, engaging an investment bank meant having a neutral and professional advisor capable of maximizing valuation. For foreign buyers, being represented by a reputable bank signaled credibility and seriousness. At that time, private equity was less active in Italy, and many transactions were industrial in nature. Banks had access to proprietary databases and long-standing client relationships, making them the primary channel for sourcing and executing transactions.

Today, the landscape is different. Technology and access to global information platforms—such as professional networks and transaction databases—have made it easier for entrepreneurs to identify potential partners or buyers independently. Italian companies increasingly conduct their own preliminary outreach and analysis.

As a result, many now approach law firms at an earlier stage. For example, an Italian company may seek advice on opening its capital to foreign investors or selling due to generational transition issues. Law firms are perceived as independent and free from the conflicts of interest that can sometimes arise with financial intermediaries. Additionally, initial strategic guidance from counsel is often more cost-effective at the exploratory stage.

In this evolving model, lawyers sometimes act as informal facilitators—discreetly circulating information memoranda and leveraging their networks, including relationships with investment banks and advisory boutiques. This is not the core mandate of a law firm, but it has become an important component of building transaction pipelines.

Financial advisors still play a crucial and highly valuable role, particularly in valuation, structuring, and execution. They are instrumental in bridging pricing gaps, organizing competitive processes where appropriate, and managing formal auction dynamics.

The key shift is that while investment banks remain central to execution and structuring, the initial sourcing and strategic positioning of deals in Italy increasingly begins elsewhere—often with the company itself and its legal advisors.

Deal Structuring in Italy

D.R.: Until roughly ten years ago, closing accounts adjustments were the standard mechanism in most transactions. That was certainly the case in my experience.

Today, while closing accounts are still used, the lockbox mechanism has become equally common. It is difficult to quantify precisely—whether the split is 50/50 or 60/40—but both approaches are now widely adopted in the Italian market.

This shift reflects the growing influence of private equity in European and Italian M&A activity. In particular, private equity funds tend to prefer the lockbox mechanism over closing accounts adjustments, as it provides greater price certainty and simplifies post-closing dynamics.

M.S.: When a traditional price adjustment mechanism is used—typically based on working capital or other accounting parameters—the process is relatively complex.

Before closing, the seller is required to prepare a provisional balance sheet as of the closing date. This becomes the reference point for determining the estimated purchase price. The deal then closes on the basis of that estimated balance sheet.

After closing, the buyer reviews the company’s accounts and prepares its own final balance sheet as of the same closing date. The purpose is to verify whether the estimated figures align with the actual figures. If there is a difference—positive or negative—an adjustment to the purchase price is made, often based on deviations in net working capital.

This process is time-consuming and resource-intensive. It requires significant effort from both sides and often creates the risk of disputes. Differences in accounting treatment, the classification of items, or the interpretation of agreed principles can lead to disagreements. For that reason, the parties must agree in advance on detailed accounting guidelines to ensure consistency between the provisional and final balance sheets. Even then, the risk of litigation cannot be excluded.

The lockbox mechanism simplifies this dynamic. Instead of relying on a balance sheet prepared at closing, the parties agree on a historical, often audited, balance sheet—typically dated three to six months prior to closing. That balance sheet becomes the fixed reference point for pricing.

From that reference date to closing, the seller undertakes not to extract value from the company. This is achieved through “no leakage” covenants. For example, the seller agrees not to distribute dividends, not to enter into related-party transactions, not to grant loans or security in favor of itself or its affiliates, and not to otherwise transfer value out of the business.

After closing, the buyer’s review is limited to verifying that no leakage occurred during the interim period. If leakage is identified, the purchase price is adjusted accordingly.

The lockbox structure is therefore more straightforward. It reduces post-closing complexity, limits accounting disputes, and is generally easier to manage—particularly when dealing with less sophisticated sellers.

Earnouts in Italy

M.S.: Earn-out mechanisms have become more common over the years. However, in Europe—and particularly in Italy—they are still not used as extensively or with the same level of sophistication as in the United States or other Anglo-Saxon jurisdictions.

In the Italian market, earn-outs are primarily used to bridge valuation gaps between buyer and seller. They allow for an increase in the purchase price if the target company achieves agreed financial milestones after closing. Typically, these mechanisms are relatively straightforward. The focus is on clarity and simplicity to minimize the risk of post-closing litigation.

Earn-outs in Italy generally last between one and three years. It is rare to see an earn-out extending beyond three years from closing. They are usually tied to key financial KPIs such as EBITDA, revenue, or gross margin—core economic parameters that are easier to measure objectively.

The most complex aspect is balancing two conflicting interests. On one side, the buyer must retain flexibility to manage the company as it sees fit post-acquisition. On the other, the seller needs visibility and reassurance that the buyer will not take actions that artificially depress performance to avoid paying the earn-out.

When sellers retain a minority stake, this issue is often addressed in the shareholders’ agreement. The buyer typically agrees to manage the company in the ordinary course of business, while the seller—sometimes with board representation—may receive information rights or, in certain industrial transactions, limited protections regarding extraordinary transactions that could materially impact the earn-out.

Private equity buyers, however, generally resist veto rights tied to earn-outs. They prefer structural flexibility and may instead negotiate alternative arrangements, including accelerating earn-out payments to preserve strategic freedom for add-on acquisitions or broader portfolio decisions.

In some cases, a hybrid structure is adopted. Part of the deferred consideration may be combined with management incentive plans, such as stock options or long-term incentive schemes. When sellers remain in managerial roles, a portion of their compensation may shift from upfront purchase price to performance-based remuneration. These incentive schemes are often linked to different performance metrics than the earn-out, helping align behavior and reduce manipulation risk.

Ultimately, the success of an earn-out structure in Italy depends on designing a balanced framework that aligns incentives, preserves operational flexibility, and reduces the potential for post-closing disputes.

Minority Investment in Italy

D.R.: The starting point in structuring minority investments is always clarity of intent. The first step is to engage with the client and fully understand their strategic objective.

Is the investor acquiring a minority stake with the intention of increasing ownership over time? Is there a plan to acquire 100% of the company in the future? Or is the investment purely financial, with a defined exit horizon? Establishing the timeframe and long-term strategy is essential before designing the governance framework.

Once this is clear, the focus shifts to governance. This is typically addressed through a shareholders’ agreement and corresponding amendments to the company’s bylaws or articles of incorporation, depending on the jurisdiction.

The first fundamental element is information rights. A minority investor must have access to timely and meaningful information to monitor performance and assess whether the business is progressing in line with expectations.

Second, board representation is usually advisable. Having a seat on the board allows the minority investor to participate in strategic discussions and exercise veto rights over specific board-level decisions.

Third, veto rights at the shareholders’ meeting level are commonly included, particularly for extraordinary transactions such as capital increases, disposals of material assets, changes to the corporate purpose, or other structural decisions. These protections ensure that the minority investor can block actions that may materially impact the value of their investment.

Of course, the scope and thresholds of these rights can vary significantly. There is flexibility in structuring different levels of protection depending on bargaining power and commercial context. However, the core package typically includes information rights, board representation, and carefully defined veto rights—forming the foundation of minority protection in Italian transactions.

M.S.: In minority investments, it is equally important to structure exit mechanisms from the outset—both for success scenarios and downside protection.

Alongside the main share purchase agreement, it is common to include ancillary put and call option arrangements. For example, where an investor initially acquires a majority stake—or even a significant minority—it may negotiate a call option exercisable after one or two years. This allows the investor to increase its participation or acquire full ownership if the investment performs as expected.

Conversely, although less frequent, a put option may be structured to allow the investor to exit by selling its shares back to the original sellers. While this is typically a more extreme safeguard, it can provide comfort in situations of underperformance.

Pricing mechanisms for future transfers can also be structured flexibly. Rather than fixing a predetermined price at signing, the exercise price of a call option may be linked to the company’s future enterprise value. If the business grows and increases in value, the seller—who may have retained 20% or 30%—benefits proportionally when the call is exercised. This can function as an alternative to an earn-out, aligning incentives while avoiding complex post-closing calculations.

Additionally, drag-along and tag-along rights are standard features of minority governance frameworks. Drag-along rights allow a majority shareholder to require minority shareholders to sell in the event of a full exit. Tag-along rights, in turn, protect minority investors by allowing them to participate in a sale initiated by the majority, ensuring they are not left behind.

Together, these mechanisms—options, flexible pricing formulas, and coordinated exit rights—create a structured pathway for future ownership changes and provide clarity on how the relationship will evolve over time.

Another structure that is increasingly common—particularly in private equity transactions—is rollover or reinvestment by the seller.

In this model, the seller reinvests a portion of the sale proceeds into the holding company established by the private equity fund to complete the acquisition. Instead of exiting entirely, the seller “rolls over” part of the equity into the new acquisition vehicle.

This structure serves multiple purposes. From a pricing perspective, it can help bridge valuation discussions. The seller receives partial liquidity upfront while retaining exposure to the future performance of the business under private equity ownership.

More importantly, it aligns incentives. By reinvesting in the holding company, the seller participates in the value creation strategy implemented by the fund. When the private equity investor eventually exits—whether through a sale or another liquidity event—the seller benefits proportionally from the increased enterprise value achieved during the holding period.

In essence, rollover equity allows the seller to monetize part of the business while remaining economically aligned with the fund’s long-term growth strategy.

Labor Regulations in Italy

M.S.:  Labor regulation in Italy is particularly strict and generally more protective of employees than employers.

For example, structuring a transaction as an asset deal rather than a share deal does not, in itself, provide grounds for terminating employees. If a buyer acquires a business unit together with its assets and workforce, the mere transfer of ownership is not considered a justified reason for dismissal.

In practice, this means that a buyer cannot complete an asset acquisition and then implement redundancies simply because there are overlapping roles or internal reorganizations. Italian law does not permit terminations solely on the basis of a change of ownership.

Moreover, before completing an asset deal, the buyer is often required to consult with local trade unions and works councils. The parties must inform them of the intended transaction and discuss its implications for employees. In certain cases, buyers may also be required to commit to retention measures, including agreements not to dismiss employees for a specified period following the acquisition.

This dimension is particularly important when dealing with founder-led businesses. In many Italian small and medium-sized enterprises, employees have long-standing relationships with the company and are often viewed as part of an extended family. For many Italian entrepreneurs, the protection of employees is a central concern when selling their business. Ensuring workforce stability is often as important as achieving the right price.

D.R.: In many cases, certain employees are not only protected by regulation but are also strategically critical to the future of the business.

Some of these individuals hold key relationships with customers, suppliers, or local stakeholders. Others possess technical knowledge or operational expertise that cannot easily be replaced. Their contribution is often embedded in the company’s culture and day-to-day performance.

For this reason, when an Italian seller emphasizes the importance of retaining specific employees, that recommendation should be taken seriously. It is rarely driven by sentiment alone. In many instances, it reflects a practical assessment of what is necessary to preserve continuity and protect the long-term value of the investment.

For investors, particularly in cross-border transactions, listening carefully to the seller’s perspective on key personnel can materially increase the likelihood of post-closing success.

M.S.:  And this, I mean, this applies also to large Italian companies, uh, because we advised, for instance, I advised where a Japanese conglomerate was acquiring an Italian listed company. However, Italian and company, which brings the name, the last name of the founder in its, uh, in its, uh, you know, name. So Paul, the founder, was essential, okay, to get an, a retention, uh, commitment undertaking from the Japanese buyer, not to fire or terminate even one employee for at least two years.

So this not only applies to small companies where again, probably there is also very close relationship between the owners and the employees, but also to large company because big Italian employers, businessmen, they want to save their face and keep their reputation on the diamond market. 

Best Tip for Foreign Buyer in Italy

D.R.:  The relationship with the seller and the managers of the company or the employees. 

M.S.: It is essential to invest time upfront in building relationships and trust. This is not time wasted; it is time invested. That early effort often determines whether the deal ultimately closes smoothly.

For example, inviting the seller to visit the buyer’s headquarters—whether in the United States or elsewhere—can be highly valuable. Likewise, visiting the Italian target, meeting key managers in a discreet and respectful manner, and introducing the broader vision of the acquiring company all contribute to establishing credibility.

Explaining what the acquiring company does, how synergies may be created, and what the long-term potential of the transaction could be—also for employees and management—helps reduce uncertainty. It transforms the transaction from a purely financial event into a shared strategic opportunity.

Beyond formal meetings, informal interactions also matter. A handshake, a dinner, and genuine personal engagement often carry significant weight in Italian business culture. These moments reinforce trust and can make the difference when negotiations become complex.

In cross-border transactions, relationship-building is not an optional courtesy. It is a strategic investment that facilitates alignment and increases the probability of successful execution.

‍