Citi says Italy M&A slows but luxury still attracts

By Jo Winterbottom and Paola Arosio

MILAN (Reuters) - Mergers & acquisitions activity in Italy slowed again in the first four months of this year, but there are still areas of interest including infrastructure and luxury markets, Citi executives told Reuters on Thursday.

"From January to April 23, activity in Italy was down 56 percent to $34 billion from a year earlier," Paolo Galli, head of Italy Mergers & Acquisitions for Citi, said.

"It was a further slowdown from the fourth quarter," he said, adding that the timing of any pick-up was uncertain.

"It's not a question of have we hit bottom, but of how long will we be at these low levels," Galli said.

But he added that there was still business being done in Italy, albeit with trends towards smaller deals -- under 1 billion euros -- and ones that require less leverage as credit markets continue tight.

"Our dialogue with clients is very active," he said.

Sovereign funds, which have been investing globally despite current market turmoil, may increasingly look at Italy and might be interested in some of its luxury brands and infrastructure, said Sergio Ascolani, head of Italy Investment Banking for Citi.

"I am sure they are interested in the luxury sector and as Italy is in the vanguard (of this business) it's an area they are likely to look at," Ascolani said.