UBS investment bankers have had a good run in Italy, with the firm making several important stock deals recently. This includes the sale of Telecom Italia’s fixed network assets and the Italian government’s sale of its stake in Banco Siena.
Before merging with Credit Suisse, UBS employed around 500 people in Italy across three divisions: wealth management, asset management and investment banking. The merger added about 300 more people.
“The merger with Credit Suisse was very complementary.” [for us in Italy]” said Riccardo Mulrone, Country Head of UBS Italy and Head of the Italian Investment Bank. “It was a match made in heaven.”
italian investment bank
Mr. Murone has led the investment banking business in Italy since 2011. During this time, UBS has advised on several milestone transactions, including Fiat’s acquisition of Chrysler in 2009 and Italian sports car maker Ferrari’s listing on the New York Stock Exchange in 2015.
UBS was the sole global coordinator for the Ferrari deal. Mr. Mulone said the firm has conducted more initial public offerings in New York for Italian companies than any other bank.
Most recently, he was lead financial advisor to Swiss Exchange-listed global travel retailer Dufry in its acquisition of Milan-listed Autogrill to create the world’s largest travel retail group. Ta. While Dufry specializes in duty-free shops and other travel outlets, Autogrill provides food and beverage services at airports, train stations and highways in 30 countries.
Muron knows both parties and says a merger has been discussed in various forms over the past decade. “This was one of those deals I knew I wouldn’t be able to retire if I didn’t do it,” he says.
Finally, towards the end of 2022, things were “completely right”. It was his two-tier deal. Italy’s Benetton family has agreed to sell a 50.3% stake in Autogrill to Dufry. The company’s family holding company, Edizione, received a 25% stake in Dufry in return.
This was followed by a compulsory tender offer for Autogrill’s remaining shares, and the company was delisted in July 2023. In October, the new business, which has sales totaling CHF13.6 billion ($15.65 billion), announced it would rebrand itself. As Avolta.
If repeat business is a sign of a satisfied customer, then UBS seems to have consistently satisfied Ermenegildo Zegna, one of Italy’s most iconic fashion companies, founded in 1910. Mr. Mulrone met with Zegna’s namesake chairman, Gildo Zegna, who was a director at Fiat Chrysler. . UBS then advised Zegna on its $500 million acquisition of New York fashion house Thom Browne in 2018.
In 2021, UBS advised Zegna on its New York listing through a special purpose acquisition company, valuing the company at $3.2 billion including debt. The Spac vehicle was led by former UBS CEO Sergio Ermotti.
Most recently, UBS served as the sole financial advisor on Zegna’s acquisition of American designer Tom Ford’s business, and established long-term licenses for American cosmetics company Estée Lauder and Tom Ford Fashion.
As a result of this complex transaction, Estée Lauder is the sole owner of the Tom Ford brand, while Zegna owns the fashion business and manufactures and sells all of the brand’s fashion products. Zegna has been manufacturing Tom Ford men’s clothing since 2006.
“Brands are typically run by people who run fashion businesses,” Mulrone says. “This is a unique case where fashion doesn’t own the brand.”
In November 2023, Telecom Italia announced that it had agreed to sell its fixed-line network to Optics Bidco, a consortium managed by US private equity firm KKR. The deal, which has not yet been completed, is believed to be worth up to 22 billion euros.
UBS acted as financial advisor to the Italian Ministry of Economy and Finance, which invested in the KKR consortium. MEF will invest up to 2.2 billion euros to acquire up to 20% of NetCo’s shares. Italy is poised for a large-scale rollout of fiber broadband, and the government recognizes communications as a strategic national asset that must be modern and secure. It could have ensured this through strong regulation, but instead it has chosen to take an equity position as the owner of the network.
TIM is heavily in debt, and the sale ends a long search to find a way to monetize its network holdings and protect jobs.
“Options included an attempt by KKR to acquire TIM in its entirety,” said Guido Colonetti, a UBS managing director in charge of sponsor coverage in Italy. He described the final solution as a groundbreaking deal with almost no precedent in the world. “This makes his TIM smaller and more nimble with less debt,” Colonetti says.
This deal caused some confusion. Most notable is the turmoil at French holding company Vivendi, which owns 24 percent of TIM. Vivendi, which is currently recording losses on its investments, argued that KKR’s offer was too low and questioned the TIM board’s decision to accept the offer without a shareholder vote.
The transaction, which is expected to close this summer, will reduce TIM’s debt by approximately 14 billion euros. KKR establishes a wholesale-only fixed digital infrastructure provider open to all carriers.
Alessandro Amato, executive director of UBS, said: “This strategic move will expand the deployment of fiber optics and accelerate digitalization as part of Italy’s national recovery and resilience plan.” Ta. “This deal is one of the largest sponsorship deals in Italian history and is a testament to the strength of the partnership between KKR and MEF.”
UBS acted as financial advisor to Italian-Dutch confectionery and chewing gum maker Perfetti Van Melle on its $1.35 billion acquisition of Mondelēz International’s gum business in North America and Europe.
The transaction was announced in December 2022 and completed in October 2023, excluding the Portuguese part of the business, which was awaiting domestic competition permits. “This brings together well-known and complementary brands,” explains UBS Executive Director Urszka Daneu.
Perfetti Van Melle, whose confectionery products include Mentos and Chupa Chups, has acquired brands such as Trident, Dentine and Stimolol. “The company sells its products in more than 150 countries,” he says.
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The good relationship between UBS and MEF was highlighted by their role as joint global coordinators and joint bookrunners in a €920 million secondary accelerated bookbuild of MPS shares in November 2023.
Murrone described the deal as an “incredible deal” and signaled a return to health for Italy’s oldest bank. After a bailout in 2017, the government ended up owning 68 percent of MPS. In his highly successful ABB, he sold a 25 percent stake, reducing his holdings to 39 percent.
The stock was sold at a very small discount of 4.9% from its last closing price. “The market credited the government with doing a good job in managing the business, cleaning up the balance sheet and improving performance,” Muloun said.
He believes that banks’ stock prices do not reflect their true value. “Investors saw an opportunity to invest in a high-quality bank at an affordable price relative to its peers,” he believes.
They may also be expecting a takeover offer, perhaps from Banco BPM. The government said part of the motivation for the exit was a desire for fewer, larger banks.
In terms of size relative to market capitalization, the transaction was ABB’s largest to date in Italy. This places UBS in first place in the equity capital markets ranking of financial institutions groups both in Italy and in the Europe, Middle East and Africa region. UBS claims to be the international bank that has made the most secondary placements of more than 100 million euros with Italy’s ABB over the past 10 years.
Mulone doesn’t predict a “boom” for ECM in 2024, but says there will always be a good market for a good company. “Good companies will have a chance to tell their story, and it will be a smart opportunity for smart investors,” he says.
However, it is unlikely that they will be offered one contract after another this year. “Volatility will be lower and it will be a better year than 2023,” he predicts. “But we will have to choose our deals carefully. They will have to be handcrafted, but that will be our strength.”