[Last updated: 1 January 2025, unless otherwise noted]

2.1 Main legal framework

The main rules and principles of Italian law relating to public takeover bids can be found in:

• Legislative Decree No. 58, dated 24 February 1998, as amended and supplemented from time to time (the Italian Financial Act – "IFA"), Sections 101-bis - 112; and
• Resolution of the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa or "CONSOB") No. 11971, dated 14 May 1999, implementing the IFA, as amended and supplemented from time to time ("CONSOB Resolution No. 11971/99"), Sections 35 -50-quinquies.

The main body of the Italian takeover legislation is based on Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids ("Takeover Directive"). This directive was aimed at harmonizing the rules on public takeover bids of the different Member States of the European Economic Area ("EEA"). Having said this, the Takeover Directive still allows Member States to take different approaches in connection with some important features of a public takeover bid (such as the percentage of securities that, upon acquisition, triggers a mandatory public takeover bid on the remaining securities of the target company and restrictions to the power of the board of directors of the target company in connection with the takeover bid). Accordingly, there are still significant differences in the national rules of the respective Member States of the EEA regarding public takeover bids.

2.2 Other rules and principles

While the aforementioned legislation contains the main legal framework for public takeover bids in Italy, there are a number of additional rules and principles that are to be taken into account when preparing or conducting a public takeover bid, including, most notably:

1. the rules relating to the disclosure of significant shareholdings in listed companies (the so-called 'transparency rules'). These rules are based on Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004, on the harmonization of transparency requirements in relation to information on issuers having securities admitted to trading on a regulated market, as amended and supplemented from time to time, and related EU legislation. For further information, see under 3.4 below;

2. the rules relating to insider trading and market manipulation (the so-called 'market abuse rules'). These rules are mainly derived from Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse ("Market Abuse Regulation") as well as Directive 2014/57/ EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse ("Market Abuse Directive II"), each as amended and supplemented from time to time, and related EU legislation. For further information, see under 6.3 below;
3. the rules relating to the public offer of securities and the admission to trading of securities on a regulated market. These rules would be relevant in circumstances where the consideration offered in the public takeover bid consists of securities. These rules are mainly derived from Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017, as amended and supplemented from time to time, and related EU legislation;
4. the general rules on the supervision and control of the financial markets; and
5. the rules and regulations regarding merger control. These rules and regulations are not further discussed herein.

It is also worth mentioning that the Law Decree No. 91 dated 24 June 2014 ("2014 Competitiveness Decree"), introduced, among other things, the option for Italian listed companies to grant increased voting rights (up to two votes per share) to shares that are kept for a minimum holding period of at least 24 consecutive months ("Increased Voting Rights Shares"). The legal framework relating to the Increased Voting Rights Shares was subsequently amended by the Law No. 21 of 5 March 2024, which provided that the bylaws may also grant one additional increased voting right for each twelve-month period, following the first 24 consecutive months, during which shares are kept by the same holder, up to a maximum of ten additional increased voting rights per share. In the context of takeover bids, if Increased Voting Rights Shares are outstanding, then the thresholds referred in 3.1 below must be read as referring to the aggregate number of voting rights attaching to the shares held by the relevant shareholder (rather than to the mere percentage of the voting stock held). In other words, if Increased Voting Rights Shares are outstanding, the profile to be looked at for the purposes of takeover regulation is given by the actual voting powers exercisable by the shareholder and not by the mere arithmetic participation to the share capital of a listed company.

2.3 Supervision and enforcement by CONSOB

Public takeover bids are subject to the supervision and control of CONSOB, which is the securities regulator in Italy.

CONSOB has significant powers aimed at ensuring compliance with the public takeover bid rules, including the power to impose administrative fines. In case of non-compliance, criminal penalties may be imposed by the courts.

CONSOB also has the power (in certain cases) to grant exemptions from the rules that would otherwise apply to a public takeover bid.

2.4 General principles

The following general principles apply to public takeover bids in Italy. These rules are based on the Takeover Directive:

1. all holders of the securities of the same class of the target company must be afforded equivalent treatment. Moreover, if a person acquires control of a company, the other holders of securities must be protected;
2. the holders of the securities of the target company must be given sufficient time and information to enable them to make a properly informed decision on the bid. In particular, the board of directors of the target company must issue a statement where it gives its views on the adequacy of the consideration offered and the effects of a successful completion of the takeover on (i) the interests of the target company; (ii) employment and conditions of employment at target company level; and (iii) continued operations at existing sites;
3. a false market must not be created in the securities of the target company, the bidder or any other company interested in the bid in such a way that the rise or fall of the prices of the securities becomes artificial and the normal functioning of the markets is distorted; and
4. the bidder can announce the bid only after ensuring that it will be able to fulfil in full its obligations to pay the relevant consideration (either in cash or in kind).

2.5 Proposed reforms

No specific reforms to the takeover regulation in Italy have been recently proposed nor are expected.

2.6 Foreign investments

In general terms, foreign investments are not subject to specific restrictions in Italy. It should be borne in mind, however, that the Italian government has "special powers", which give the Italian government the ability to veto or impose conditions on a transaction involving a change of control over companies that hold assets in the following sectors:

1. strategic sectors: defense and homeland security, energy, transportation, and telecommunications; and
2. additional sectors: healthcare, food security, water, banking, finance, insurance, dual-use products, IT, critical technologies, sensitive information including personal data.

The Italian government may exercise its special powers if it determines that the transaction entails a threat of a serious harm to the essential interests of the Republic of Italy for the security and operation of networks and plants and continuity of supplies in the relevant sectors or a risk to national security or public order.