Where Does Spain Rank In The World Of M&A?

Where Does Spain Rank In The World Of M&A?

Where Does Spain Rank In The World Of M&A?

Global M&A activity is expected to increase in the second half of 2013, compared with a year earlier, as cheaper financing options become available and valuation gaps narrow. Dealmakers from Asia and Latin America will also help boost volumes as they build a larger presence in the M&A community.

Cross border deals will be the flavour of the month and Southern Europe is seen as a target for buyouts by investment banks and private equity firms with dry powder for investing after a sluggish 2012 and early 2013.

With the “For Sale” sign on assets ranging from prime real estate to stakes in industrial companies, Spain is a key market for many global investors. The venture capital industry has a war chest of nearly 12.7 billion euros for Spain in 2013 and many firms have already drawn up their wish-list.

ENERGY, PROPERTY, FINANCIALS TOP M&A

The energy and power sector topped the list of announced global M&A activity in the first half of 2013, commanding 15 percent of the total, according to Thomson Reuters data. Apart from the property sector which accounted for 13 percent of worldwide deals, the financial sector was also up amongst the leaders with 10 percent.

If we take these global trends into account, Spain’s potential for M&A is substantial as banks and companies continue to deleverage to trim their debt burdens. On the banking front, following the massive overhaul of the country’s savings banks to cut their number by around two-thirds, a second wave of mergers is now on the cards. Spain has long been a target market for foreign banks looking to grow their business in mainland Europe. But right now acquisition prices are more attractive for these overseas predators!

The energy sector  in Spain has also seen M&A activity this year with oil and gas giant Repsol selling off its liquefied natural gas assets to Shell. And more mergers are tipped to take place amongst the country’s smaller renewable energy firms.

SPAIN PROPERTY BEST INVESTMENT

Spain’s “bad bank” Sareb manages around 90 billion euros of real estate assets and is preparing to sell its wares at a significant discount. These assets include undeveloped property and unfinished buildings, formerly on the balance sheets of the country’s struggling lenders. Many market experts now believe that prices in Spain have bottomed out, particularly for prime office and retail properties, so what’s on offer at Sareb is enticing for global investors with an eye on medium to long-term returns.

South American investors have already bought up Spanish real estate, cashing in on the heady economic growth in their region to take advantage of opportunities.

What M&A opportunities do you see in Spain? Contact Argali Abogados for more information.

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