ITALY Law and Practice Contributed by: Roberto Bonsignore, Paolo Rainelli, Gerolamo da Passano and Nicole B. Puppieni, Cleary Gottlieb Steen & Hamilton LLP
undertakings upon the acquirer or the target company. The government may even prohibit the acquisition altogether, but this has only hap - pened in a few cases so far. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Significant M&A-related court decisions or legal developments in Italy in the last three years include the following. • Recent rulings by the Italian Supreme Court ( Corte di Cassazione ) confirmed the enforce - ability in principle of put options entitling a shareholder who has invested in a company to sell its equity interest to another sharehold - er at a fixed strike price that allows the put option holder to recover its entire investment. This issue is particularly relevant for minority acquisitions and shareholders’ agreements, and had been the subject of debate in lower courts for several years. • The use of buyer-side warranty and indem - nity (W&I) insurance policies in Italian M&A transactions has increased significantly, mainly but not only in transactions involving financial investors as sellers. There is also a more frequent use of management warranty deeds signed by the target’s senior manage - ment when the seller is unable or unwilling to provide the buyer with the business repre - sentations and warranties to be insured. The Italian market is also experiencing the first applications of synthetic W&I policies where warranties are not given by the seller, with a synthetic set of warranties instead being negotiated with the insurer. • In July 2022, the new Italian Insolvency and Restructuring Code ( Codice della Crisi ) came
into force, with a view to implementing in Italy an EU directive on restructuring proceedings. The new code has brought about a signifi - cant overhaul of the Italian insolvency and restructuring framework, with an impact on distressed M&A, which may now take place in the context of multiple restructuring frame - works. 3.2 Significant Changes to Takeover Law The main Italian rules on takeovers have not undergone any recent amendments or updates. However, the recent enactment of the Capital Markets Bill ( Legge Capitali ) introduced sev - eral changes affecting Italian listed companies, potentially impacting public M&A transactions, which include the following. • There has been an increase in the number of votes for loyalty shares of listed (or soon to be listed) companies and multiple voting shares (prior to listing), allowing up to ten votes per share in each case. Over time, this change may facilitate stock-for-stock M&A deals, as controlling shareholders of the acquirer will no longer fear dilution of their governance rights. In addition, this change may raise pricing issues in the case of mandatory tender offers on ordinary shares triggered by the acquisi - tion of multiple voting shares, which typically lack a market price as they are not listed. • There has been an expansion of the number of listed companies eligible to benefit from the rules applicable to SMEs issuing listed shares. This expansion is achieved by rais - ing the maximum capitalisation threshold for SMEs from EUR500 million to EUR1 billion. Consequently, these companies can now enjoy less stringent regulations regarding transparency in takeover bids and ownership structures.
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