The consequences of Austro-Prussian war were most momentous. After a long period, Austria was driven out of Germany. The era of Austrian domination ended and the era of the rise of Prussia was to begin.
It proved the utility of the militarist policy of Bismarck. The confederation of German states was dissolved and a new confederation of North Germany established in which the states situated in north of the river Main were included.
Some new territories were incorporated in the kingdom of Prussia. Austria had to give Venetia to Italy. Thus this war proved useful for the unification of Italy also. The success of Sadowa increased the power and encouragement of Prussia.
The last target of Bismarck was France. He knew that the war was inevitable with France in order to include the southern states of Germany into the confederation. These states were under the influence of France.
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On the other hand, the defeat of Austria in the battle of Sadowa was a serious setback to Napoleon III. He lost the friendship of such a big country like Austria.
He could not extend the frontiers of French Empire, because Bismarck clearly refused to give any territory to France. This was a great insult of France and to the French Emperor. It is said that, “It was not Austria but France which was defeated at Sadowa.”