2018 looks particularly promising for M&A operations in Italy. Thanks to the growth of the Italian economy, which will remain stable although not reaching pre-crisis level, and the overcoming of the critical issues in the banking sector, the counter value of the transactions is already estimated at € 37 billions.
Against this background, it is considered that foreign private equity founds will continue to be increasingly important in Italy in 2018, thanks to the new interpretation of carried interest as income from capital (and not, as before, an income from work) resulting in different taxation. The most favorable taxation regime (from 45% of the previous marginal rate to the current 26%) will therefore facilitate the acquisition of Italian companies. The target of foreign private equity funds in our domestic market will be mainly identified with the ICT, consumer and industrial products and services sector.
If 2016 was a favorable year for M&A activity, 2017 proved to be an even better year in terms of the number of completed transactions, even if volume did not follow the same growth trend. Finally the 2016 referendum did not substantially impact the performance of the Italian M&A market in 2017. However, it is not yet predictable what impact moving the EBA from London to Paris will have in Italy.
Political stability has a crucial role for the M&A market, not only nationally, but also globally. For this reason, the segment looks forward to the new government to be formed following the 2018 general elections: if Italian government will be able to find the desired stability, this would certainly and greatly increase in the number of deals. The new government needs to focus its energy on strengthening the growth potential of the country and work on the obstacles, which, unfortunately, are the same as ever: infrastructure, training, competitiveness of labor costs.
This is why we believe that the adoption of the national Industry 4.0 plan for industrial technological and digital transformation represents a great opportunity for companies operating in Italy.
So far, with this project, we have focused more on capital goods, with measures such as hyper-depreciation on tangible operating assets and super-depreciation on intangible operating assets. What we need now is to look more closely at the intangible assets of our companies: skills and training. So, anyway, we are on the right path.