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New rules in Italy regarding cross-border mergers, demergers and transformations

09 March 2023

The Italian Government has approved the Legislative decree no. 19 of 2 March 2023 (the “Decree”) implementing in Italy the Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019, amending the Directive (EU) 2017/1132 regarding, among other things, cross-border mergers, demergers and transformations.

The new regulation regarding cross-border transactions will enter into force as of 3 July 2023 and it introduces a new regime for cross-border transformations and demergers. In fact, prior to this new regulation, only cross-border mergers were expressly regulated in Italy by Legislative Decree No. 108 of 30 May 2008.

In addition, the Decree introduced significant changes to the Italian Civil Code regarding the withdrawal of shareholders, the transfer abroad of the registered office and introduces a new discipline on the demerger via spin-off (scissione mediante scorporo). These provisions will enter into force as of 22 March 2023.

What are the changes?

Among the most significant changes of the Decree, there is a brand new regime regulating cross-border demergers and transformations, as well as two new articles of the Italian Civil Code regarding, respectively, the transfer abroad of a company's registered office and the demerger via spin-off (scissione mediante scorporo). This Decree regulates also cross-border merger - implementing the provisions of the Legislative Decree No. 108 of 30 May 2008 (which will be abrogated as of 3 July 2023) – and applies to companies subject to insolvency proceedings, without prejudice to the relevant insolvency rules.

However, the Decree does not apply to:

investment companies with variable capital (società di investimento a capitale variabile – Sicav); and
banks and other financial institutions subject either to bank resolution regulations or insolvency prevention measures.

In any case, companies in liquidation that have begun the distribution of assets and cooperatives (cooperative a mutualità prevalente) cannot participate in cross-border transactions.

Finally, the communication or submission of false or incomplete information or documents for the purpose of obtaining the preliminary certificate now constitutes a new crime also relevant for the purposes of Legislative Decree no. 231 of 2001 regarding criminal liability of the companies.

What's more?

At the same time, the Decree introduces some significant changes to the Italian Civil Code, and notably:

the transfer abroad of a company's registered office can only be carried out by means of cross-border transformation, or as a result of cross-border merger or demerger;
the possibility to implement a demerger via spin-off (Scissione mediante scorporo), where the demerged company (società scissa): (i) assigns only part of its assets to newly established receiving company/companies (società beneficiaria/e) and (ii) keeps the shares/ quotas of the receiving company/companies.

Please contact the authors, or your usual contact in Hogan Lovells, for any further information.

Authored by Pierluigi Feliciani, and Giovanni Tuorto.