2014 Looking Bright for M&A and Investment in Spain

2014 Looking Bright for M&A and Investment in Spain

2014 Looking Bright for M&A and Investment in Spain

Like every country across the globe this New Year’s Eve, Spain will raise a toast to 2014 and hope the future is bright. And this wish could come true, judging by some of the economic indicators released over the last quarter. The uptick in foreign investor interest –  translating into some major M&A deals – is also a good sign.

In October, the chairman of the country’s biggest bank, Santander, told a news conference in New York that there has been a “drastic” change in investors’ perception of Spain. “Everyone is interested in investing in Spain,” Emilio Botin said.

Botin’s positive outlook was reinforced a few days later by the news of Microsoft co-founder Bill Gates’ purchase of 6 per cent of Spanish infrastructure group FCC.

So what has rekindled investor confidence in Spain?

SPAIN’S COMPETITIVENESS DRIVES EXPORTS

Following reforms implemented by the government, the Spanish worker has become extremely competitive in terms of wages and production, which has led to strong export growth for Spain in 2013. The country finally exited a two-year recession in the third quarter, largely due to its dynamic exports sector.

“Spain has become an export powerhouse, and it will fully leave the recession behind in 2014,” said independent advisory services firm Arcano in a report. Private investment and consumption growth will turn positive after three years of decline, and credit levels will stabilise, Arcano said.

There are already signs that domestic demand is emerging from the doldrums. In September, retail sales rose for the first time since June 2010, while automobile sales jumped 26 per cent year-on-year.

Another driver of future economic growth and a contributor to renewed investor interest in Spain is the growth in start-ups. In the first half of this year, 51,000 companies were created, the highest level since 2009. Spain’s government has established a framework for supporting and financing new businesses with its Entrepreneurs Law.

Business creation during a crisis is the best recipe for future wealth,” Arcano said.

SPAIN 2014: TIME TO RUN WITH THE BULLS

So will 2014 be the year to run with the bulls and bet on Spain? That’s the view of several international investment firms that have already set up shop in the country. These funds have  bagged assets ranging from land and property to bank branches and small manufacturing firms with proven growth and export potential.

Spain’s real estate market – where prices are beginning to bottom out after a five-year slump – will continue to attract long-term investors, as will its banking sector, now in the final stages of a massive restructuring.

A booming tourism industry will also fuel more investment in Spain’s hospitality sector.

For information on Spain’s investment opportunities, contact corporate law firm Argali Abogados.

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