M&A in Spain on Up And Up in 2013

M&A In Spain In 2013 On Up And Up

M&A in Spain on Up and Up in 2013

Spain has been a hub for M&A in 2013, a fact that is not surprising given the extent of deleveraging by its banks, forced to sell off assets to clean up their balance sheets and boost capital. But banks have not been alone in disposing of non-core assets.

Top firms like Telefonica have rotated their industrial portfolios to ease their debt burden or free up cash for new acquisitions. And as Spain edges out of its two-year recession, it is an attractive target for investors who recognise growth value and long term yield potential when they see it.

In the third quarter of 2013, Spain’s M&A market notched up an increase of 28 per cent to 9.5 billion euros from a year earlier, according to consultants TTR.  Quarter-on-quarter, the market doubled in terms of euros.

A total of 195 deals were closed in the third quarter, with 24 operations signed by the US and 20 signed by France. These two countries were the most active players in the Spanish market over that period.

SPAIN LURES TOP M&A PLAYERS

One of the M&A highlights this year was Microsoft co-founder Bill Gates  purchase of a 6 per cent stake in infrastructure group FCC. The 113.5 million euros investment was hailed as a vote of confidence in Spain.

Top private equity firm Blackstone has been a busy dealmaker over the last few months, on both sides of the M&A fence! Betting on the upside potential for Spain’s rental market, the US-based firm bought 18 apartment blocks from Madrid’s regional government. It has also recently spearheaded the biggest venture capital deal in Spain so far this year, selling canning firm Mivisa to Crown Holdings.

Telefonica has also been wheeling and dealing, selling its Irish unit to Hutchison Whampoa a month before snapping up Royal KPN NV’s German wireless business. The Spanish telecoms giant plans to seek more M&A opportunities.

MORE M&A ON THE CARDS

So is this acquisition fever set to continue in the coming months? Spain’s banks have been at the forefront of corporate activity, following a massive overhaul of the industry weighed down by soured real estate assets after a property crashA second wave of mergers is likely. Spain has long been a target for foreign banks looking to grow their business in mainland Europe, and prices are now attractive.

Venture capital firms will continue to monitor the sale of distressed loans and foreclosed property by the country’s bad bank Sareb. The amount invested in Spain by venture capital firms rose to 3.182 billion euros in the third quarter from 211 million euros in the second.

For information on M&A in Spain, contact corporate law firm Argali Abogados.

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