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Compliance assessment of an intra-group asset transfer with the market economy operator principle

Lear has been appointed by a State-owned Italian company to assess whether an intra-group transfer of assets, without a monetary transfer from the beneficiary company, could lead to the creation of a economic value at the group level, and thus satisfy the market economy operator principle test, meaning that a private investor would have the incentive to undertake the same operation, and it does not constitute State aid. Lear has analysed the operation using both the free cash flow to equity and the free cash flow from operations to show that the transfer of assets would be efficiency-enhancing, thus leading to the creation of economic value and satisfying the test.