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"The market remains difficult, you have a plenty of Italian firms telling you that the market is great and they're doing very well, but the reality is the market is still quite difficult," says one partner.

With good targets still rare, banks squeezing liquidity and price discrepency between buyers and sellers, the Italian M&A market is not in the best health.

"Expectations are still quite high from sellers, there's just not the same willingness from purchasers to pay high prices, purchasers are much more selective than they were before and also although banks are willing to finance transactions, they are much more careful," explains one partner and another agrees: "There are assets for sale, but then purchasers and also financing banks are more selective in targeting purchases and in targeting companies. This is creating a selection problem generally."

One additional problem this has created in the legal market is that large firms are finding that they have to lower their sites in terms of mandates on which to pitch and this in turn is leading to a squeeze of the lower and mid markets as one partner explains. "Top firms focus on main market transactions, because there are less transactions in the market, this is squeezing all the market down, and squeezing some of the firms that used to be there."

Where there is plenty of work is in renewable energy which continues to thrive despite the threat of the government's feed-in-tariff changes. "I think energy is still quite active, energy is quite active because there is still solar activity under renewable energy investments," says one M&A lawyer, "although probably this is going to slow down because the incentives are going away, as the government is trying to reduce the feed-in-tariff."

Private equity, on the whole is looking more healthy, with various players in the market looking to divest assets or indeed find new ones in which to pump their funds. "Private equity is starting to move a little bit, there have been some very good transactions," says one partner. However it seems that as in all areas, there is simply not enough on the table to allow everyone to feed. "It's not so easy for the big players in the private equity arena to find the right targets," says one partner, "and often they all compete for the same targets, so at the end of the story if you have four or five deals in Italy per year, there will be all the same private equity funds competing, one against the other one."

"They're absolutely competent and specialised. They're certainly within the top five law firms in Italy," says one client. "We're talking about very skilled, very well-prepared, with a boutique-dimension. For me they're the best option." One rival adds: "Bonelli's still the leader in M&A market, so I think tier one should be fine."

Clients believe that the firm's high quality service is down to its recruitment. "Their recruitment is very rigid, they take the top-rated people on board and they're coming from the best universities," says one. "In the country the rest of the law firms are more flexible and they're not rigid in selecting people."

Rivals also believe that the reputation of the firm's M&A practice is bound up with one of the co-founders Franco Bonelli. "In M&A, Bonelli Erede Pappalardo has Mr Bonelli, of course, that is the difference," says one.

When it comes to the firm's client list, one customer says: "Bonelli's full of clients and it's everywhere. As far as I know, they've got very big clients, all the blue chips are turning to Bonelli." This in turn means the firm has a measured approach when seeking new mandates, "They're not so aggressive, and they're OK to attract new clients. They're not very pushy, which is good," says one. "If you're very pushy maybe it means you don't have enough clients; this means maybe you're not a very good lawyer."

In 2010, one of the largest transactions saw a team of practitioners, including Umberto Nicodano, Andrea Carta Mantiglia, and Eliana Catalano, advise a group of minority shareholders of Weather Investment on the €16 billion acquisition by VimpelCom through a share swap procedure. The shareholders include Apax Partners, TA Associates, and Madison Dearborn Partners.

Nicodano was also involved in another notable mandate when he worked alongside Claudio Tesauro and Giorgio Fantacchiotti to advise acquirer Prysmian on the acquisition of Draka through a public tender offer valued at €1.2 billion. The mandate allowed Prysmian to become a true global player in the cable industry.

The team's ability to always hit deadlines also draws clients' praise: "They've no problems with speed; they're very much focused on achieving the target. No problem at all," says one. "I've no reason to complain about their performance, quality, or the service response."

Elsewhere an on-going mandate saw the team advise LVMH in relation to the Bulgari family's 50.43% share contribution to the French luxury-goods giant in exchange of its newly issued shares. The Bulgari family is the majority shareholder of an Italian watch and jewellery maker. Following the contribution, LVMH is expect to launch a mandatory tender offer over all remaining Bulgari stakes at €12.25 per share. The transaction was worth approximately €4 billion.

Another highlight saw the team advise Crédit Agricole on its acquisition of the 80% of Cassa di Risparmio della Spezia's share capital and of 96 Italy-based branches of Intesa San Paolo for approximately €740 million.

Elsewhere the team also advised Unilever on the sale of its Italian frozen food business Findus Italy to Bird Eye Iglo Group, the private-equity firm owned by Permira. The enterprise value was approximately worth €800 million, and the acquisition value was approximately €580 million.

The firm's fee levels also satisfies its clients. "They're very flexible when negotiating fees, because I've got 50% or 40% of the discount," says one, he then goes on to talk about his relationship with the lawyers: "I'm very happy and I'm glad that they're close to me, close to my company. They're very prepared, very competent, and powerful in terms of contacts. I couldn't expect much more."

Alongside Bonelli, Chiomenti's market position has been recognised by its rivals. "Both firms [Chiomenti and Bonelli] are the leaders in M&A," says one, while another adds: "If you look at Chiomenti or Bonelli. They're more comparable [to each other]."

One of the firm's biggest M&A deals in 2011 saw Michele Carpinelli and Francesco Tedeschini lead the team advising Bulgari, an Italian jeweller and luxury good manufacturer, on the sale of a majority stake to a France-based luxury goods group LVMH Moet Hennessy Louis Vitton. The mandate was worth approximately €3.9 billion. "Mr Carpinelli's a very strong lawyer," says one rival.

On another occasion Tedeschini was again involved in an approximately €1 billion transaction when he led the team advising the target company Prima Holding on its acquisition led by Anima and Prima through a combination of share capital increases and cash acquisitions. One of the purposes of the share capital increase was to allow Banca Popolare di Milano to enter the shareholding structure of the acquirers together with Lauro Quarantadue, a controlling entity of Prima Holding, and Monte dei Paschi de Siena.

Another substantial deal, worth €670 million and closed in October 2010, saw Filippo Modulo, Paolo Tommaso, and Giovanni Diotallevi lead the team advising Sun Terarid and Terna on the transfer of the total share capital of Rete Rinnovabile to Terra Firma Investments Capital Partners III.

At beginning of 2011, Carlo Croff led the team advising on a €521 million transaction when he acted for Intestindustrial on the 50.68% share capital acquisition of SNAI by Global Games, part of Investindustrial group and Palladio Finanziaria.

"Cleary Gottlieb is another international law firm which is quite visible in the M&A market," says one rival, while another adds: "In terms of the volume of the work the firm has done, it is quite comparable to its tier-one contemporaries, such as Gianni Origoni Grippo & Partners."

The firm's leading partner Roberto Casati is well respected in the market and certainly made an impression on peers: "Casati is very good lawyer, but he's a bit of the character," says one.

Even though the market remains difficult, the firm still managed to pull off some substantial deals. One highlight saw Matteo Montanaro lead the team advising Terna on its 22% acquisition in CGES. This formed part of Terna's wider partnership with CGES and the State of Montenegro for the development of electricity connection infrastructure.

Other transactions saw Giuseppe Scassellati-Sforzolini team up with Roberto Bonsignore to advise ENI in the disposal of gas transportation assets in Austria and Germany. Elsewhere Bonsignore worked alongside Casati to advise A2A in relation to a possible industrial and corporate reorganisation of Edison.

When comes to the cross-border transactions, the firm has also showed its clear presence in the international arena by advising on a number of mandates. In one, an Italian team has been working alongside their Paris colleagues to advise Groupama in connection with its potential acquisition of stakes in Premafin and Fondiaria.

The other saw a multi-jurisdictional team, combined with the firm's Milan, Paris, Moscow, London and New York offices, acting for Wind Telecom group in creation of the world's fifth largest mobile telecommunication carrier with the group's partner VimpelCom.

Gianni Origoni Grippo Cappelli & Partners holds its high ranking firmly in this edition due to the markets' recognition of its "volume of professionals", "the number of deals and the type of transactions".

Over the last 12 months, partner Alessandro Giuliani was the key figure at the firm acting in the Italian M&A market. One notable deal saw Giuliani work alongside Eugenio Grippo advising Vimpelcom in relation to its merger with Weather Investments. The mandate, worth €20 billion, will create the fifth largest mobile telecommunications carrier worldwide.

Elsewhere Giuliani advised acquirer Unilever on the €1.275 billion acquisition of the body care business of Sara Lee Household and Body Care Italy.

A €300 million mandate again involved Giuliani when he led the team advising General Electric finance company's corporate reorganisation in Italy, with the creation of a banking group controlled by Interbanca.

Partner Francesco Gianni also took on work advising the bidder Lion Capital on the €800 million acquisition of Findus Italia, an Italian frozen food and seafood company.

One joint venture transaction, worth €440 million, saw partner Rosario Zaccà advise Corio's acquisition of 50% stake from the Allianz Group's Porta di Roma shopping centre, the largest shopping mall in Europe. The centre is now owned in a 50/50 joint venture structure by Allianz Group and Corio.

Clifford Chance's Italian team advised TeamSystem on its management buyout transaction backed by HG Capital last year. The acquisition of TeamSystem, valued at €565 million, was believed to represent one of the first large LBOs in the Italian market since the credit crunch in 2007.

Another highlight, worth €805 million, saw a team of partners including Alberta Figari and Matthew Layton, advise Birds Eye Lglo, sponsored by private-equity firm Permira, on its acquisition of Findus Italy from Unilver. It was believed to be one of the largest LBO transactions in the Italian market since 2007.

Another notable mandate valued at €626 million saw Paolo Sersale advise Abertis on the sale of its 6.68% stake in Atlantia, the mandate was closed in January 2011.

Filippo Troisi and Gian Paolo Tagariello teamed up from Legance Studio Legale Associato advised Generali Properties on the €2.1 billion acquisition of the interest held by Lamaro Appalti in Citylife; the team also advised on the negotiation of new shareholders' agreements and ancillary agreements with the shareholders Allianz and Immobiliare Milano.

In another notable transaction, a team of partners including Alberto Giampieri, Giandomenico Ciaramella and Andrea Fedi, advised a pool of banks, including UniCredit Corporate banking and Intea Sanpaolo alike, on the financings to Sesto Immobiliare and in the subscription of equity instruments issued by Sesto Immobiliare in the context of the acquisition of Falk from Risanamento.

Freshfields Bruckhaus Deringer advised Merck, a global pharmaceutical and chemical company, on the Italian aspects of the disposal of Théramex to Teva Group last year with the mandate worth €265 million.

Lead partner Nicola Asti then advised Gefco on the 70% share capital acquisition of Gruppo Mercurio from Venice, a private equity arm of Palladio Finanziaria Group and the RP3 Fund.

"Lombardi Molinari e Associati sometimes does M&A, they've got very good clients," says one peer, and another adds: "People at Lombardi are doing very well. Mr Lombardi is one of the leading lawyers in Italy."

The firm has been kept busy with a number of M&A mandates. One highlight saw the team advising Palladio Finanziaria on the execution of an agreement aiming to the acquire a control share in Snai, a company active in the legal betting market.

Another notable deal saw the firm advise Banca Popolare dell'Emilia Romagna Soc. Coop and its affiliate Meliorbanca on the sale of Meliorbanca Private to Santaner Private Banking.

When comes to the Italian M&A markets, Linklaters has moved up one-tier this year due to its pears' strong recommendations. "To be honest, I think they're stronger players than what they're ranked here, they've got several good M&A partners, they certainly belong to either tier three or four." Though one M&A practitioner also points out that the firm's position is arguable, "They've got some good people, but they haven't been so present," explains one. "For example, in the team system transaction, they advised the purchaser HG Capital, it was actually the London team rather the Italian team doing it."

One notable mandate saw a team led by Luca Picone advise Terra Firma Capital Partners on the acquisition of Rete Rinnovabile amounting to €670 million.

Another highlight saw a team led by Picone involved again advising HG Capital on the acquisition of the €565 million share capital of TeamSystem, a leading accounting software manufacturer in Italy. The mandate was considered as the second largest LBO in the Italian corporate markets and it is also an example of private equity houses selling assets to each other.

December 2010 saw an Italian team led by Giovanni Pedersoli advising Citicorp Finanziaria on the sale of its Italian personal loans business worth €543.5 million to two "Law 130" SPVs.

Allen & Overy has gained clients' approval with Giovanni Gazzaniga and Francesco Guelfi in particular coming in for praise. "They're both top notch, they're very smart, they're business-orientated, and they're always keen on finding solution for the clients," says one. "Their legal knowledge is very very good, I've never objected anything on their ability, and I'm very satisfied."

Last year Paolo Ghiglione led the team acting for Sage, a listed British software company in a bid to acquire the Italian software provider TeamSystem in the public auction launched by private-equity firm Bain Capital. Ghiglione was again involved when he advised on a €1 billion mandate related to the sale of Tirrenia, an Italian state-owned owner of ferries and cruise ships currently being privatised.

In the energy markets, the team acted for SunPower, the global manufacturer of solar cells and panels, on the sale of a number of solar power plants in Italy, including the sale of its 15MW Solare Roma solar power plant to Allianz Renewable Energy Partners Capital IV; the sale of a 44MW Montalto di Castro solar park to a consortium of investors comprising MetLife, Fondo PPP Italia and Voigt & Collegen.

Among Carnelutti Studio Legale Associato's corporate M&A mandates, one notable example saw Luca Arnaboldi lead the team advising SunEdison on the sale of Europe's largest photovoltaic power plant in the Veneto Region, which is currently under construction, to the private-equity fund First Reserve. The €276 million transaction was closed on October 1 2010.

Last year Paul Hastings Janofsky & Walker's lead partners Bruno Cova and Antonio Azzarà teamed up to advise Mackenzie Financial Corporation, Zenit Asset Management and Skagen Funds on the sale of their shares in Italian listed company Parmalat to French multi-national dairy products corporation Lactalis valued at €750 million.