Spain M&A Sector Continues Growing

Spain M&A Sector Continues Growing

Spain M&A Sector Continues Growing

Companies across the globe are expected to show increased appetite for M&A in 2015, continuing the positive trend registered last year, consultancy firm KPMG said in a February sector report.

As the impact of the financial crisis has eased over the last two years or so, firms have been able to pay down debt and start building up cash to fund fresh acquisitions.

Easier access to credit has also been a factor influencing the rise in deals in 2014 and completed deal volumes and values over the six months have already reversed the downward trend of recent years, according to KPMG.

So where does Spain fit into this positive panorama?

Well last year the country posted an 8 percent year-on-year rise in M&A operations, while the value of these deals grew 54 percent, according to Thomson Reuters data.

One of the most important deals in the European telecommunications market was sealed in Spain in 2014:  Vodafone’s buy of local cable operator Ono.

As Spain’s economic recovery continues to boost investor confidence, more wheeling and dealing is guaranteed in the coming months!

MIDDLE MARKET DEALS SET TO GROW

Spain’s GDP growth is forecast to outperform that of its peers in 2015. But to ensure the recovery is sustainable the country will require capital investment across a range of industries.

Thanks to a series of government reforms, many Spanish businesses have become more competitive and are prime targets for foreign investors keen to buy into future growth.

International private equity firms are stepping up their activity in Spain, targeting middle market buy opportunities in sectors linked to domestic demand  and exports, both seen as key drivers for the economy.

Real estate M&A is likely to remain buoyant in 2015 as investors scramble to pick up assets before the recent slight up-tick in prices is finally consolidated.

Some global investment funds have already made acquisitions via Real Estate Investment Trust or Reits, which offer many tax advantages.

DISPOSALS, IPOs TO FUEL FURTHER M&A

Spanish companies will also be active in M&A as they seek to expand market share, benefiting from some firms’ decision to focus on their core business and divest non-strategic assets either through private sales or initial public offerings (IPOs).

Privatisations of state-owned companies – such as the ongoing partial privatisation of airports’ operator AENA – are also expected to boost corporate deals.

Sectors to watch:
• Spain’s banking sector: despite having undergone substantial restructuring over the past two years, further consolidation is not ruled out
• The infrastructure and energy sectors: in particular, more tie-ups and asset disposals are tipped to take place in the energy market.

For information on investment in Spain, contact corporate law firm Argali Abogados.

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