The Italian government has recently published its 2024 Annual Report on Foreign Direct Investment (the Report), providing an overview of the exercise of its special powers, commonly referred to as "Golden Power," in sectors deemed strategic for national security. The Report highlights how these powers have been increasingly applied to oversee corporate transactions involving critical infrastructure, including defence, energy, telecommunications, healthcare, and, more recently, finance.
The Report
The key takeaways of the Report are as follows:
- A total of 835 filings were submitted in 2024 (660 notifications and 175 pre-notifications), representing a 15% increase from the previous year and a tenfold rise compared to 2019. Notably, 47% of these filings were found to fall outside the scope of the Golden Power regime. This high exclusion rate reflects the broad and often ambiguous nature of Italy's FDI rules, which lack clear guidance on what constitutes a strategic activity or how the regime applies to non-traditional deal structures (e.g., limited partners in private equity). Combined with the significant consequences of non-compliance, this uncertainty often leads to precautionary filings.
- Of the filings deemed in scope, only 8% (30 cases) resulted in the imposition of conditions or commitments, including on EU and Italian investors. Two transactions were vetoed, one of which involved an Italian buyer, the first such case on record. The veto was based on the dual-use nature of the target's products. While there are precedents involving EU acquirers (notably French), this marks a significant development in the regime's application to domestic actors.
- The data reflects a growing focus on transactions involving EU and Italian investors, signaling a shift from a foreign investment screening tool to a broader mechanism for strategic oversight of national assets.
- The Report also notes an increased use of the EU cooperation mechanism, indicating closer alignment with the European framework for FDI screening and enhanced cross-border coordination.
It also underscores how Golden Power has evolved from a defensive measure against foreign takeovers into a proactive instrument potentially used for shaping the strategic direction of key national assets even when transactions involve domestic players. This shift is particularly evident in the ongoing high-profile case of UniCredit's proposed acquisition of Banco BPM.
The UniCredit-Banco BPM case
Announced in late 2024, the UniCredit-Banco BPM merger aimed to create Italy's largest banking group. The government intervened, citing national security concerns, and imposed several conditions: maintaining the current loan-to-deposit ratio in Italy for five years, preserving project finance levels, ensuring continued investment in Italian securities by Anima Holding (a Banco BPM affiliate), and exiting operations in Russia within nine months.
UniCredit challenged these measures before the Regional Administrative Court (TAR) of Lazio, arguing that they were disproportionate and lacked legal clarity.
A few days ago, the TAR partially upheld UniCredit's claims, affirming that economic security falls within the scope of national security but finding that certain commitments, particularly the five-year duration of the loan-to-deposit ratio and the extension of project finance obligations to UniCredit, were excessive and insufficiently justified. However, the court upheld other conditions, including the Russian exit and Anima-related commitments, recognizing the government's interest in protecting strategic financial assets.
European Commission scrutiny and broader implications
The UniCredit- Banco BPM case has also drawn scrutiny from the European Commission (the Commission). In a formal communication to the Italian government dated July 14, 2025, the Commission questioned the legal basis for the intervention, particularly the classification of UniCredit as a "foreign" entity. It noted that UniCredit is headquartered and operates primarily in Italy, with no controlling foreign shareholder. The Commission's preliminary view is that the decree may conflict with EU rules on the free movement of capital and the freedom of establishment, and it has requested a formal response from the Italian government.
This case illustrates the expanding use of Golden Power in domestic transactions and raises broader questions about the balance between national oversight and EU internal market principles. While the Government is reportedly preparing a revised version of the contested decree, UniCredit has officially withdrawn its Public Tender Offer for Banco BPM, citing unresolved Golden Power conditions and continued regulatory uncertainty. The decision reflects the bank's assessment that the current environment does not allow for a viable path forward, and no relaunch of the offer is currently anticipated.
Whether this marks the end of the UniCredit–Banco BPM saga remains uncertain. The case has already reshaped the debate over Italy's use of Golden Power, but it may not be the last of its kind. More broadly, the episode may signal a shift in how Italy asserts national control over strategic sectors.
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