1) Is a merger control regulation in force?

Yes. Italian Law No. 287 of 10 October 1990 (“Italian Competition Act”) sets out the rules governing merger control, and Presidential Decree No. 217 of 30 April 1998 (“Procedural Regulation”) sets out the applicable procedural provisions. Italy is an EU Member State and is therefore subject to the EU Merger Regulation (“EUMR”). 

2) Which authorities enforce the merger control regulation?

The Italian Competition Authority (“ICA”), Autorità Garante della Concorrenza e del Mercato and the European Commission (“Commission”). 

3) Relevant regulations and guidelines with links:

Merger control provisions are set out in Arts. 5–7 and Arts. 16–20 of the Italian Competition Act. The Procedural Regulation is fully applicable to mergers.

As to merger filings, the ICA has adopted guidelines for merger notifications  (“Guidelines”) and standard form for notifications (“FormCO”) – both available here – which contain all the instructions needed for filing. The FormCO is quite similar to the one used for EU notifications.

Italian merger control rules must be interpreted in light of the EU principles developed by the Commission and the EU courts. These principles are automatically incorporated into the Italian system (Art. 1(4) of the Italian Competition Act). The Italian rules are interpreted and applied in light of the Commission’s Consolidated Jurisdictional Notice adopted under the EUMR (“Commission Jurisdictional Notice”).

4) Does general competition regulation apply to mergers or ancillary restrictions?

According to the Guidelines, the undertakings involved in a given merger must inform the ICA (by completing the applicable section of the FormCO) of any potentially restrictive agreements concluded in the context of the merger. The ICA verifies the ancillary nature of such agreements (i.e., whether they are directly related and strictly necessary to the implementation of the merger) by applying the principles set out in the Commission Notice on restrictions directly related and necessary to concentrations (2005/C 56/03).

In general, a non-compete obligation is legitimate on condition that it is limited in time and limited in geographic scope to the territories where the seller is active or, in the case of joint ventures, where the controlling undertakings are active. Restrictions that go beyond what can be considered ancillary can still be evaluated under Arts. 101 and 102 TFEU. In any case, the above must be interpreted in line with the Commission Notice on ancillary restraints.

5) May an authority order a split-up of a business irrespective of a merger?

In the case of an infringement of Arts. 101 or 102 TFEU, the ICA may impose any structural remedy that is proportionate to the infringement and necessary to bring the infringement effectively to an end (see Art. 15 of the Italian Competition Act). In addition, the ICA recently introduced the possibility of imposing structural remedies also in the context of sector inquiries, on condition that it finds that there are competition concerns that hinder or distort the market’s proper functioning (See Section VI of the ICA’s communication on the application of Art. 1(5) of Law Decree No. 104 of 10 August 2023, converted with amendments into Law No. 136 of 9 October).

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Depending on the sector involved, an obligation to file can arise also with the following authorities (among others):

1. The Bank of Italy in the banking sector
2. The Institute for the Supervision of Insurance (IVASS) in the insurance sector
3. The Communications Regulatory Authority (AGCOM) in the communications sector
4. The Regulatory Authority for Energy, Networks and the Environment (ARERA) in the energy and gas sectors

Foreign investment control

With the aim of safeguarding the ownership structure of companies operating in sectors considered strategic and of national interest, the legislator laid down provisions in the FDI Law allowing the Italian Government to exercise special powers over foreign investments.

Foreign investments which meet the conditions laid down by the FDI Law must be approved by the Presidency of the Council of Ministers (“Presidency” or “FDI Authority”). Investors are prohibited from implementing the investment before the Presidency’s approval (standstill obligation). 

What is considered a “foreign investment”

The FDI Law does not define what a foreign investment is; rather, it covers all qualifying investments carried out by any person (natural or legal) in sectors that are strategic within the meaning of the FDI Law. As to notification obligations, the FDI Law distinguishes between EU and non-EU investors, as explained in further detail below. EU/EEA investors only fall within the scope of the FDI Law in certain limited circumstances explained below.

Under the FDI Law, a foreign investor is any person (natural or legal) who:

1. is not a national of an EU Member State;
2. is a national of an EU Member State but is not established in an EU Member State or in the EEA;
3. is not established and does not have its registered office in an EU Member State or in the EEA;
4. is established or has its registered office in an EU Member State or in the EEA but is directly or indirectly controlled by a person meeting the conditions under the points above; or
5. is a national or is established in an EU Member State or in the EEA for the purpose of circumventing the application of the FDI Law.

An FDI filing is required under the FDI Law when a foreign (i.e. non-EU) investor carries out:

1. any resolution, transaction or act concerning, among other things, a merger/demerger, incorporation, transfer of a branch of business or subsidiary, or constitution of a pledge over the shares of a company active in a strategic sector within the meaning of the FDI Law; and
2. any acquisition, whether directly or indirectly, of 10% or more of the corporate capital or voting rights of a company active in a strategic sector within the meaning of the FDI Law.

Specific rules apply to companies active in certain sectors, where notification obligations arise depending on whether the investor is EU or non-EU.

Sectors protected under the FDI Law

Defence and national security

A mandatory notification obligation arises in the case of:

1. acquisition of a shareholding higher than 3% in a listed company or 5% in an unlisted company, regardless of the investor’s nationality (i.e., including EU investors); a notification obligation arises also if the following shareholding thresholds are crossed: 5%, 10%, 15%, 20%, 25% and 50%;
2. establishment of a new company; and
3. certain shareholders’ meeting resolutions (on mergers/demergers, transfer of a branch or subsidiary, etc.).

Broadband 5G technology

Contracts or agreements that concern goods or services relating to 5G technology must be notified.

Energy, water, health, data storage, electoral, financial, AI, robotics, cybersecurity, food, dual-use items, media, non-military aerospace, transport, and telecommunications

In the fields of communications, energy, transport, health, food and finance, including credit and insurance, the acquisition of control by any non-EU or EU persons (thus, including even those resident in Italy) triggers a notification obligation. In these sectors, a notification obligation arises also if:

1. a non-EU shareholder acquires at least 10% of a company’s corporate capital or voting rights by means of an investment of at least EUR 1 million;
2. a non-EU shareholder incorporates a new company in which it holds at least 10% of the corporate capital or voting rights; or
3. a company adopts a decision or carries out a transaction concerning strategic assets that it owns.

Moreover, in the water, media, data processing/storage, aerospace, electoral infrastructure, AI, robotics, and dual-use items sectors, internal restructurings must be notified to the Presidency of the Council of Ministers.

Screening procedure

The parties may submit a pre-notification before signing a binding agreement (e.g., a sale and purchase agreement), to seek confirmation from the Presidency’s Department of Administrative Coordination that the envisaged transaction is not subject to a formal filing obligation. The ordinary time limit for the Department of Administrative Coordination to issue a decision is 30 days from submission of a pre-notification. 

If the foreign investment meets the criteria laid down in the FDI Law, or if the Department of Administrative Coordination does not issue a decision within the 30 days following pre-notification, the investor must file a notification and obtain the Presidency’s clearance. Notifications must be filed using a single form and must include a wide range of information, e.g., about the investor’s and target’s ownership structures, business activities, and the financing of the transaction. 

As to the statutory review period for a formal notification, the Presidency has 45 calendar days to issue a decision. The review period can be suspended for up to 30 days in the case of requests for information from the Presidency (10 days for requests to the notifying parties and 20 days for requests to third parties). If the Presidency does not issue a decision within 45 days, the transaction is considered cleared based on the principle of tacit consent.

There is usually no disclosure of information to, or involvement of, third parties during the review period. A very general summary of the transaction could be published in the Government’s annual report on FDI proceedings, which is published mainly to provide statistics on the number of notified transactions during the previous year.

No fees are required for FDI filings in Italy.

If the notification obligation is not complied with, the Presidency may impose a fine on the investor of up to 1% of its total turnover for the last financial year.

The screening procedure has the following potential outcomes:

The decision can be challenged before administrative courts, i.e., the Lazio Regional Administrative Court and, on appeal, the Council of State. Such action does not have suspensive effect.

7) Are any parts of the territory exempted or covered by particular regulation?

No.

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory (before closing) if the thresholds are crossed. Moreover, under Art 16 (1-bis) of the Italian Competition Act, the ICA may require filing up to 6 months after the closing of transactions that cross only one of the two thresholds (“below-threshold transactions”).

The ICA’s communication on the application of Art. 16 (1-bis) of Law No. 287 of 10 October 1990 (“Communication on below-threshold transactions”) provides useful guidance on when the ICA might require the notification of a below-threshold transaction. To this end, the undertakings involved in a below-threshold transaction may decide to voluntarily inform the ICA of the transaction if they meet the conditions set out in Art. 16 (1-bis) of the Italian Competition Act.

For further insights on below-threshold filings, see topic 14.

9) Is there a general definition of transactions subject to merger control?

Under the Italian Competition Act (Art. 5), the following types of transaction are subject to merger control:

1. merger between two or more undertakings;
2. acquisition – by one or more parties controlling at least one undertaking – of direct or indirect control over the whole or parts of one or more undertakings, whether through the acquisition of shares or assets, by contract, or by any other means; and
3. creation between two or more undertakings of a joint venture by setting up a new company.

10) Is "change of control" of a business required?

Yes, a concentration arises whenever a transaction involves a change of control (within the meaning of competition law) on a lasting basis.

11) How is “control” defined?

Art. 7 of the Italian Competition Act provides a broad definition of control, which includes both direct and indirect control and sole and joint control.

More specifically, control is acquired in the cases envisaged in Art. 2359 of the Italian Civil Code, i.e. a company is controlled by another company when the controlling party: (i) has the majority of the votes exercisable at ordinary shareholders’ meetings; (ii) has a sufficient number of votes to exercise a dominant influence at ordinary shareholders’ meetings; or (iii) can exercise a dominant influence over the company by virtue of specific contractual links. Control or the ability to exercise a dominant influence over an undertaking (alone or jointly) may be obtained through:

1. property rights or rights of use of all or part of the assets of an undertaking; and
2. rights, arrangements or other legal relationships that confer a decisive influence over the composition or the decisions of an undertaking’s corporate governance bodies.

In any case, the ICA generally refers to the definition of control provided in the Commission Jurisdictional Notice.

For further insights on the notion of joint control, see topic13.

12) Acquisition of a minority interest

Acquisitions of minority shareholdings must be notified only if the transaction concerned leads to a change in the control structure of the undertaking concerned, e.g., if the minority shareholder comes to hold veto rights over decisions considered strategic for the undertaking, such as budgets, business plans and the appointment of top management.

13) Joint ventures/joint control – which transactions constitute mergers?

JVs must be notified if they operate on the market as an autonomous economic entity (‘full-function’ JVs). To assess whether a JV is full-function, the ICA applies the criteria set out in the Commission Jurisdictional Notice, i.e., it checks whether the JV performs (on a lasting basis) all the functions of an autonomous economic entity (e.g., because it has its own dedicated day-to-day management team and access to resources such as finance, staff and assets).

Under the Italian Competition Act, any transaction involving a change of control on a lasting basis must be notified. To this end, the acquisition of joint control is subject to mandatory notification when there is a change from sole to joint control (and vice versa) or when there is a change from non-control to joint control (e.g., in the case of a newly created JV). Joint control exists when two or more undertakings or persons can exercise decisive influence over another undertaking. To this end, the criteria set out in the Commission Jurisdictional Notice is met, e.g., in the case of equal voting rights; if this is not the case, joint control can still occur if the minority shareholder has powers to veto strategic decisions or to appoint members of top management.

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

Under Art. 16 of the Italian Competition Act, a transaction must be notified to the ICA before its implementation if the following cumulative thresholds are crossed:

1. the combined aggregate national turnover of all the undertakings concerned exceeds EUR 567 million; and
2. the aggregate domestic turnover of each of at least two of the undertakings concerned exceeds EUR 35 million.

The above thresholds are subject to annual review.

Moreover, as mentioned in topic 8, the ICA can request a below-threshold transaction to be notified within 30 days (without prejudice to the possibility for the parties to request an extension of the 30-day period) if:

1. at least one of the above thresholds is crossed or, in any case, if the worldwide turnover of the undertakings concerned is higher than EUR 5 billion;
2. there is a concrete risk that the concentration would harm competition in the Italian market (or in a relevant part of it); and
3. no more than 6 months have elapsed since the merger was concluded.

In accordance with the Communication on below-threshold transactions (Translation into English not available), it is unlikely that the ICA will request the notification of: (i) horizontal mergers of entities with a combined market share lower than 25% or (ii) of vertical mergers of entities with a market share lower than 30%. Moreover, the ICA will likely scrutinise transactions whenever the target: (i) is a start-up with significant potential market power; (ii) is an important innovator, or (iii) has access to competitively significant assets (raw materials, data, infrastructure, and/or IP rights).

b) Market share thresholds

N/A

c) Value of transaction thresholds

N/A

d) Assets requirements

N/A

e) Other

N/A

15) Special thresholds for particular businesses

None; however, see topic 17 for different criteria for calculating turnover.

16) Rules on calculation and geographical allocation of turnover

The total turnover generated at national level refers to the total revenue from the sale of products and provision of services in the last completed and audited financial year on the Italian market, minus returns, discounts and taxes that are directly related to the sale of products and the provision of services.

In the case of an acquisition of sole or joint control: (i) the relevant turnover for the acquiring party is the consolidated turnover achieved by the group to which it belongs; and (ii) the relevant turnover for the acquired party is the turnover achieved by the acquired party and its controlled entities. Specific rules apply to JVs. 

From a geographical standpoint, relevant turnover is that generated from sales in Italy.

Intra-group sales are not to be considered part of the group’s turnover.

Is the seller/seller’s group turnover relevant in a standard acquisition of sole control?

The seller’s turnover doesn’t need be taken into account unless the seller retains joint control (in which case it is considered an entity acquiring joint control).

17) Special rules on calculation of turnover for particular businesses

Credit and other financial institutions

For credit and other financial institutions, turnover must be calculated as the sum of the following components of income minus, where applicable, VAT and other taxes directly related to income:

1. interest and similar income;
2. income from shares, units and other variable income securities, income from participating interests, income from shares in affiliated undertakings, and other income from securities;
3. commission income;
4. profits from financial operations; and
5. other operating income.

Insurance undertakings

For insurance undertakings, turnover must be replaced by the value of gross premiums issued, which must comprise all amounts received or receivable under insurance contracts concluded directly by or on behalf of the undertaking concerned, including premiums ceded to reinsurers, minus taxes or parafiscal charges levied on the amount of premiums or on the total volume thereof.

18) Series of transactions that must be treated as one transaction

If the merger involves the acquisition of parts of one or more undertakings, two or more transactions concluded between the same persons or undertakings within 2 years are deemed to be a single concentration carried out on the day of the final transaction. To this end, the ICA applies the principles set out in the Commission Jurisdictional Notice.

According to the Commission Jurisdictional Notice, two or more transactions constitute a single concentration if they are unitary in nature. To determine the unitary nature of the transactions in question, it is necessary, in each individual case, to ascertain whether those transactions are interdependent, in such a way that one transaction would not have been carried out without the other. However, several transactions, even if linked by condition upon each other, can only be treated as a single concentration if control is acquired ultimately by the same undertaking(s). Only in these circumstances can two or more transactions be considered to be unitary in nature and therefore to constitute a single concentration.

A single concentration will also arise in cases where control over one undertaking is acquired by a series of transactions in securities from one or several sellers taking place within a reasonably short period. Generally, if two or more transactions (each bringing about an acquisition of control) take place within a 2-year period between the same persons or undertakings, they will qualify as a single concentration, regardless of whether those transactions are related to parts of the same business or concern the same sector.

19) Temporary change of control

Merger filing is required only if a change of control occurs on a lasting basis.

20) Special industries, owners or types of transactions

The Italian Competition Act stipulates that there is no notification obligation in the following situations:

1. a credit or financial institution purchases shares on a temporary basis (less than 24 months) with the intention of selling them again.
2. the transaction concerns an internal re-organisation within the same group of companies.

21) Transactions involving only foreign businesses (foreign-to-foreign)

No exemption exists for foreign-to-foreign transactions. These types of transactions must be notified if the undertakings concerned generate turnover in Italy and cross the relevant thresholds, as in this case it can be presumed that the transaction’s effects could impact the domestic market or a substantial part thereof.

22) No overlap of activities of the parties

No exemption exists for transactions with no overlap of activities; however, if no overlap exists, the parties may submit a simplified FormCO (see topic 33).  

23) Other exemptions from notification duty even if thresholds ARE met?

Due to the EU’s ‘one-stop shop’ principle, the merger control rules set out in the Italian Competition Act do not apply if the thresholds for EU merger control are crossed.

24) May a merging party file voluntarily even if the thresholds are not exceeded?

Art. 16 of the Italian Competition Act stipulates that notification is mandatory only if the applicable thresholds are crossed (see topic 14).

See topic 8 for information on the voluntary notification of below-threshold transactions (whereby the undertakings involved can voluntarily notify a transaction to the ICA when one of the two turnover thresholds is crossed). This voluntary notification must in any case be submitted to the ICA within 2 months of the transaction’s completion.

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

As outlined in topic 8, the ICA may request the notification of below-threshold transactions under certain conditions. Moreover, following the judgment of the Court of Justice in the Towercast case, the ICA may decide to open an investigation for breach of Arts. 101 and 102 TFEU in the case of anticompetitive mergers that have not been reviewed under Italian or EU merger control rules.

26) Referral within the jurisdiction

N/A

27) Referral from another jurisdiction

Under Art. 9 EUMR, the ICA (on its own initiative or upon the invitation of the Commission) may request the Commission to refer a notified concentration to the ICA itself if the criteria set out in Art. 9 EUMR are fulfilled, i.e., if a concentration threatens to significantly affect competition in a market within Italy, which presents all the characteristics of a distinct market, or a concentration affects competition in a market within Italy, which presents all the characteristics of a distinct market and which does not constitute a substantial part of the common market.

A transaction could also – upon request by the parties - be referred to the ICA by the Commission in accordance with Art. 4(4) EUMR, which differs from Art. 9 EUMR in that the referral request must be submitted before the concentration with a Community dimension is notified by the undertakings concerned. The main requirement is that the concentration could significantly affect competition in a market within a Member State, which presents all the characteristics of a distinct market.

28) Referral to another jurisdiction

Under Art. 22 EUMR, the ICA (alone or together with other competition authorities from different Member States), on its own initiative or upon the invitation of the European Commission, may request the Commission to examine the concentration that was notified or otherwise made known to them and that does not have a Community dimension, but affects trade between Member States and threatens to significantly affect competition within the territory of the Member State(s) making the request.

29) May the merging parties request or oppose a referral decision?

Referral to the ICA:

If a merger is subject to EU merger control, the parties may (under Art. 4(5) EUMR) – prior to an EU merger notification – request that the merger is referred to the ICA, provided that the merger may significantly affect competition in a distinct market in Italy. If the ICA does not oppose such referral, the European Commission may decide to refer the merger in whole or in part.

The European Commission must decide whether to refer a merger within 25 working days of receipt of the request (reasoned submission).

The European Commission may also, on its own initiative or upon request from the ICA, decide to refer a merger that has already been notified to the European Commission to the ICA. Such a referral decision must be taken within 65 working days after the merger notification has been filed. The merging parties cannot oppose such a referral decision.

Referral from the ICA:

Under Art. 4(5) EUMR, a concentration which does not have a Community dimension and which is capable of being reviewed under the national competition law of at least three Member States may be referred to the Commission at the reasoned request of the undertakings concerned.

If none of the relevant authorities oppose the referral, the European Commission will handle the merger notification and no notifications are needed in Italy or any other EU member state. If any of the national authorities in question oppose the referral within 15 working days, the merger must be notified to each of the relevant national authorities.

30) Stage of transaction when notification must be filed

Transactions that cross the applicable thresholds must be notified before their implementation. Notifications may be filed before signing, as soon as the parties have agreed the essential terms of the transaction. Typically, the ICA allows parties to file notifications based on a letter of intent or a term sheet. 

31) Pre-notification consultations

Pre-notification is not legally required but is considered good practice. The ICA engages in pre-notification discussions with parties upon request.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

Mergers that are a consequence of acquisition of securities on a stock exchange or a public takeover bid must be notified to the ICA at the same time they are notified to the National Commission for Companies and the Stock Exchange.

In the case of a takeover bid notified to the ICA, the ICA must notify the opening of its investigation within 15 days of receipt of the notification and, at the same time, must notify the National Commission for Companies and the Stock Exchange.

An order to suspend implementation of a merger until conclusion of the investigation does not prevent implementation of a takeover bid that has been notified to the ICA, on condition that the acquirer does not exercise the voting rights attached to the securities in question.

33) Forms available for completing a notification

The Guidance provides a FormCO with 10 sections. If the transaction does not give rise to any affected markets, the FormCO may be submitted in simplified form, i.e., without completing section VI.

Under section VI.1 of the Guidance, a merger gives rise to affected markets in the relevant product and geographic markets if:

1. two or more of the parties to the merger are active in the same market and will hold a post-merger market share of 20% or more with an HHI delta greater than 150, or a post-merger market share of 50% or more;
2. one of the parties to the merger holds a market share of 20% or more, and any other party to the merger is either a potential competitor (an entrant may be considered a potential competitor if it has planned to enter a market or has developed or pursued such a goal within the last 3 years) or is a new entrant (entered the market within the last 5 years);
3. one of the parties to the merger will hold a post-merger market share of 30% or more, and at least one other party is active in a market that is upstream or downstream from that market (the latter market is also to be considered affected);
4. one of the parties to the merger holds a market share of 30% or more, and any other party to the concentration holds assets (such as raw materials, infrastructure, data or IP rights) that are important to that market or to a neighbouring market closely related to that market;
5. one of the parties to the merger is active in a product market that is a neighbouring and closely related market to a product market in which another party to the merger is active, and the individual or combined market share of the parties in either market is 30% or more;
6. the target company is an important innovator or is conducting potentially important research; or
7. the target company is a start-up or new entrant with significant competitive potential and has yet to develop or adopt a business model that generates significant revenues (or is still in the early stages of implementing such a model).

If none of the above conditions are met, the parties can file a simplified form.

34) Languages that may be applied in notifications and communication

Notifications and communications must be in Italian. Supporting documents drafted in other languages must be accompanied by appropriate translations of the relevant sections. After consultation with the case team, translations might not be necessary for documents drafted in English. The ICA has the authority to request complete translations at any time.

35) Documents that must be supplied with notification

The FormCO and the Guidance (Section X) stipulate that notifying parties must provide the following documents:

1. documents relevant to the merger;
2. takeover offer prospectus (if a public takeover offer is being notified);
3. copies of the annual reports and financial statements for the last 3 financial years of all undertakings involved in the concentration; and
4. documentation used for notification purposes (e.g., documentation used for market definition, quantification of market size and market shares, and a description of competitive conditions, competitors (actual and potential) and/or the potential for sales growth or expansion into other product or geographic markets).

If the transaction gives rise to at least one affected market, the notifying parties must also provide internal documentation, i.e., copies of:

1. the minutes (or extracts from the minutes) of the shareholders’ meeting(s)/board of directors’ meeting(s) at which the transaction was discussed;
2. analyses, reports, studies, surveys, and presentations enabling the merger to be assessed or examined with respect to its scope, market shares, competitive conditions, and competitors (actual and potential); and
3. analyses, reports, studies, surveys and any similar documents prepared within the previous 2 years to assess any affected markets with respect to market shares, competitive conditions, competitors (actual and potential), and/or the potential for sales growth or expansion into other product or geographic markets.

36) Filing fees

None.

37) Is implementation of the merger before approval prohibited?

In Italy, a merger must be notified before its implementation, but no standstill obligation exists – so the parties may implement the merger before obtaining the ICA’s approval.

However, if the ICA opens an in-depth investigation into the merger (Phase II investigation; see topic 43), it may suspend the implementation of the merger (see Art. 7 of the Italian Competition Act).

38) May the parties get permission to implement before approval?

See topic 37.

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that prevents sensitive market information from being used for purposes other than assessing the merger’s viability. To that end, a proper Chinese wall mechanism must be implemented, especially if the parties are competitors.

40) Veto rights before closing and "Ordinary course of business" clauses

An “ordinary course of business” clause that prevents the target from taking decisions outside the ordinary course of its business until the closing date is generally considered acceptable.

However, the extent to which the parties may discuss – or provide each other veto rights concerning – any decisions in their respective businesses must be assessed on a case-by-case basis.

41) Implementation outside the jurisdiction before approval – "Carve out"

The Italian Competition Act does not specifically address carve-out arrangements that are entered into by the parties to avoid delaying a merger’s overall completion.

42) Consequences of implementing without approval/permission

In general, as mentioned in topic 37, no standstill obligation exists in Italy. A merger can thus be implemented before approval, but only after notification. However, the ICA may subsequently suspend implementation.

Additionally, if a merger is implemented, the ICA has the power to require the parties to dissolve the merger, force the divestiture of the acquired shares or assets, and/or impose any other remedy necessary to address the concerns identified in its review.

If the parties fail to comply with the measures imposed, the ICA may impose administrative fines corresponding to 1% –10% of the turnover of the undertakings concerned. The seller cannot be fined (unless it retains a controlling interest).

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

The test is whether the merger will “significantly impede effective competition – in particular as a result of the creation or strengthening of a dominant position”.

A range of factors are taken into consideration, including efficiencies that could be gained from the merger (efficiency defence) and whether one of the parties is likely to fail as an independent business (failing firm defence).

45) May any non-competition issues be considered?

No. However, Art. 25 of the Italian Competition Act stipulates that the Italian Government must lay down the criteria based on which the ICA may exceptionally authorise mergers otherwise prohibited under Art. 6 of the Italian Competition Act for reasons of important general interest to the national economy in the context of European integration, on condition that such mergers do not lead to the elimination of competition from the market or to restrictions of competition that are not strictly justified by the general interest(s) invoked. In these cases, the ICA will in any event prescribe the measures necessary to re-establish full competition conditions within a specific time limit.

46) Special tests or criteria applicable for joint ventures

The assessment for JVs is the same as for other mergers.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions/commitments, or prohibited.

Commitments may take any form and can be either structural or behavioural, with or without time limitations.

48) How and when will details about the merger be published?

After formal notification, the ICA usually publishes a short notice identifying the parties and the nature of the merger. However, no specific announcement is made regarding the start of any pre-notification discussions.

49) Access to the file for the merging parties and third parties

The merging parties:

The merging parties have the right to access the file, which includes any correspondence between the ICA and third parties (including market survey questionnaires), and the right to have an overview of all documents/correspondence in the file. However, the ICA may redact confidential information pertaining to third parties and often redact their identities. The merging parties have no right to access the ICA’s internal documents and correspondence.

Third parties:

Third parties with an existing, direct and immediate interest in the merger proceedings may intervene in the proceedings and thus have access to the file upon request. Access to documents (or parts of documents) that contain business secrets is not granted.

50) Who can appeal and what may be appealed?

Interested parties, such as the undertaking(s) directly concerned by the decision, its competitors and consumers who have suffered damage, may appeal an ICA decision before the Lazio Regional Administrative Court (TAR Lazio), which has exclusive jurisdiction over these matters. The Lazio Regional Administrative Court may annul an ICA decision only on the grounds of lack of jurisdiction or competence, a violation of the Italian Competition Act, or abuse or misuse of powers. The ICA’s discretionary judgement is not subject to judicial review, except in limited circumstances. Lazio Regional Administrative Court decisions may be appealed before the Council of State (i.e., Italy’s highest administrative court).