The contract is signed in Milan, but the deal is decided in Brussels

In almost forty years of extraordinary transactions I have seen many things change: deal structures, timetables, the weight of funds relative to trade buyers. But the deepest change of recent years is a different one. Today a growing share of a transaction's risk no longer lies in the contract. It lies in the regulatory perimeter around it, and that perimeter is increasingly drawn at European level.

For anyone buying or selling a business, especially in a cross-border deal, this means asking three questions before even negotiating the price.

1. Can the deal be stopped?

Foreign investment control is no longer an issue for a handful of strategic sectors. In Italy the golden power regime has extended well beyond defence and energy, and the European framework for cooperation between Member States has made screening more coordinated and less predictable. On top of this comes the Foreign Subsidies Regulation, which allows the Commission to review acquisitions backed by financial contributions from non-EU countries. A non-EU buyer, and sometimes even a fund with foreign investors, needs to assess these issues from the term sheet. Not on the eve of closing.

2. Who bears the timing risk?

Every clearance procedure adds uncertainty to the timetable. And uncertainty about the timetable is, in the end, a question of risk allocation. Conditions precedent, long stop dates, cooperation obligations, possible break fees: these are clauses that until a few years ago were drafted almost out of habit. Today they need to be negotiated with the same care as the price and the warranties.

3. What am I really buying?

Traditional due diligence looked at accounts, contracts, litigation and employment. Today it must also look at the supply chain, sustainability, data management and the use of artificial intelligence in business processes. These are areas where European legislation is evolving fast, sometimes accelerating, sometimes with postponements and simplifications. That is exactly why they call for expert reading: the risk is either overestimating obligations that are bound to change, or underestimating liabilities that will remain.

A skill at the boundary

In my experience, first as a deal negotiator and then working on European policy in Parliament, I have learned that Brussels rules are rarely an insurmountable obstacle. They become one when they are discovered late. Read in good time, they become a tool instead: to structure the deal better, to strengthen one's negotiating position, to avoid surprises between signing and closing.

To those investing in Italy from abroad, and to Italian companies growing beyond the border, my advice is simple: bring the European dimension to the table from day one. The contract remains the heart of the deal, but today it must be written in the knowledge of what is happening outside the room where it is being negotiated.

I would be curious to hear from others working in this field. Which regulatory issue has had the greatest impact on your recent deals?