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Abstract Despite the considerable attention granted to the history of international business, we still have a limited knowledge of the historical impact of multinationals on host economies. This article presents the case of the giant Italian rayon firm Snia Viscosa which was acquired by its direct rivals, Courtaulds in the UK and the German firm Glanzstoff, in 1927. Italian deflation which underpinned the return of the country to the gold standard between 1925 and 1927 and the parlous financial conditions of Snia Viscosa proved incentives in what seemed to be a fire sale investment. This investment mitigated the credit crunch and allowed Snia Viscosa to have access to foreign rayon expertise. Evidence suggests that the regime and economic nationalism exerted some pressure on foreign interests and were instrumental in the abandonment of plans intended to reduce Italian rayon output dramatically. One contribution of this article is its use of business history to illustrate how recessions can reshape foreign direct investment flows and the tensions that may arise between domestic business interests and foreign stakeholders during recessions. In addition, the history of Snia Viscosa shows the importance of foreign interests and multinationals in the long-term industrialization of Italy.