ITALY Law and Practice Contributed by: Matteo Beretta, Alice Setari, Natalia Latronico and Riccardo Molè, Cleary Gottlieb Steen & Hamilton
the sale of products and the provision of services forming part of the ordinary business of the relevant undertaking, net of returns, rebates, discounts and taxes directly linked to turnover, such as VAT. Intra- group sales are excluded. The Authority generally applies principles consistent with the European Commission’s approach to the calculation and geographical allocation of turnover. Turnover is normally allocated to Italy by reference to the location of the customer or the place where the goods or services are supplied. Foreign Currency Where turnover is booked in a currency other than euros, the amounts should be converted into euros using the average exchange rate for the financial year to which the turnover relates. In practice, parties com - monly rely on European Central Bank exchange rates. Banks, Financial Institutions and Insurance Undertakings Specific rules apply to the calculation of turnover of banks, financial institutions and insurance undertak - ings. For banks and other financial institutions, turno - ver is replaced by the sum of certain income items, including interest and similar income, income from securities and participating interests, commissions, profits from financial operations and other operating income, net of applicable taxes directly linked to those items. For insurance undertakings, turnover is calculated by reference to the value of gross premiums written, including premiums received and receivable under insurance contracts, net of taxes and contributions charged by reference to the amount of those premi - ums. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds Undertakings Concerned The undertakings whose turnover is relevant depend on the type of transaction. The Authority generally follows the European Commission’s approach to the concept of “undertakings concerned” and to the allo - cation of turnover.
In an acquisition, the relevant turnover is that of the entire corporate group to which the acquiring entity(- ies) belongs (belong), including entities directly or indi - rectly controlled by the same ultimate parent com - pany, and that of the acquired undertaking and its controlled subsidiaries, or of the acquired assets or business, where the transaction concerns only part of an undertaking the target business. The seller’s turnover is not included, unless the seller retains joint control over the target after completion. In a merger, the relevant turnover is that of each of the merging undertakings, including their respective groups. In the creation of a full-function joint venture, the rel - evant turnover includes the turnover of the parent undertakings acquiring joint control and the turnover attributable to the joint venture or to the assets and businesses contributed to it. Changes During the Reference Period The reference period is normally the last completed financial year. Where the structure of the relevant group or business has changed materially during or after that period, for example because of acquisitions, divestments or closures, turnover should be adjusted to reflect the economic perimeter of the undertaking concerned at the time of the transaction. 2.8 Foreign-to-Foreign Transactions Foreign-to-foreign transactions may be subject to Ital - ian merger control if both Italian turnover thresholds are met. The fact that the parties are incorporated outside Italy, or that the transaction is negotiated and completed abroad, does not exclude Italian jurisdic - tion. There is no separate local effects test and no Italian physical presence is required. The relevant nexus is normally established through Italian turnover, meaning that the Authority does not need to prove it separately. If the target has no turnover in Italy, the ordinary thresholds will not be met. However, such transactions may still need to be considered under the Authority’s below-threshold call-in powers, discussed in 2.11 Power of Authorities to Investigate a Transaction .
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