FountainVest, a Chinese private equity firm, has cleared a major hurdle in its bid to take EuroGroup Laminations private. The Italian government approved FountainVest’s acquisition of a controlling stake, overcoming months of regulatory scrutiny. This decision, made under Italy’s golden power regime, allows the state to impose conditions on transactions involving strategic assets. The approval was granted with unspecified conditions, as detailed in a document sent to parliament. FountainVest aims to acquire the 45.7% stake held by EMS Euro Management Services at €3.85 per share, with EMS reinvesting 50% of the proceeds into a new holding company. The transaction is expected to conclude in the first half of 2026.

EuroGroup Laminations, founded in 1967 near Milan, is a global supplier of stators and rotors for electric vehicles and industrial machinery. The company has seen private equity interest since 2020 when Tikehau Capital acquired a 30% stake. EuroGroup listed in Milan in 2023, raising €250m. However, its market capitalization has fallen by about two-thirds, reflecting slower-than-expected electric-vehicle adoption and geopolitical strains affecting global supply chains. The approval in Italy is a crucial step, but additional regulatory clearances in Mexico and India are still needed.

The success of FountainVest’s bid depends on securing the remaining approvals and navigating the complexities of golden power regulations in Italy. These regulations have been increasingly used to scrutinize foreign acquisitions, sparking criticism from business communities and EU officials concerned about excessive state intervention. As the deal progresses, market observers will watch for signs of how Italy balances economic interests with national security concerns. The outcome could set a precedent for similar transactions in the future.

Italy's use of its golden power rules reflects a broader trend of governments asserting control over strategic assets, particularly in the technology and energy sectors. This move by FountainVest comes amid a backdrop of global private equity activity in the electric vehicle supply chain. As the world transitions to cleaner energy, control over critical components like stators and rotors becomes increasingly valuable. The resolution of this deal could influence how other foreign investors approach similar opportunities in Italy and beyond.