Spanish M&A surges again despite obstacles

ma-spanish-black-whiteThe Spanish market is on target to surpass 100,000 million Euros in mergers and acquisitions this year. This sees Spain in line to at least be in sight of parity with last year’s final figure of 102,776 million euro, one of the best ever years for this kind of business in Spain and bearing out recent reports that M&A activity was going to be a major player in Spain’s developing economy.

The current figure has six more weeks to catch up to that of last year as, up to November 15, 98,682 million euros had been generated through 1608 operations.

Enrique Gutierrez, of consulting firm Deloitte in Spain, was participating in the recent conference ‘Political situation, Brexit and interest rates: Investors’ responses to uncertainty.’ The conference was organised by Deloitte and TTR and Gutierrez said. ‘Although 2015 was the strongest in recent years in mergers and acquisitions, the data for 2016 does not disappoint despite uncertainty at national and international level.’

THE MOVERS AND SHAKERS

Some of the biggest players in the M&A market were Coca-Cola Iberia, Gamesa and the Quiron Salud Group. At the top of the list is the creation of Coca-Cola European Partners which is now valued at 20,000 million Euros. Then there was the merger of Gamesa with the Siemens wind farm at a cost of 6,615 million euros. The third major notable development was the purchase of Chiron Health by the Fresenius group for 5,760 million Euros.

Judging the field by the sheer number of operations, the busiest sector has been real estate with 403 acquisitions or similar projects. This beats technology into second place which saw 153 operations while the financial and insurance area benefited from 115 such activities.

The most active country putting money into Spain was the USA with 71 deals worth 3,340 million Euros. The UK is hot on its heels in second place with 69 for a total of 5,524 million. This is followed by France – 58 operations for 2.05 billion Euros – Germany – 25 for 7,106 million – and Luxemburg with 19 for 4,771 million.

Going the other way, Spanish companies have mainly invested in the USA with 27 operations generating 2,025 million Euros. The country has also taken part in 18 operations apiece in France for 315 million and Portugal for 2,472 million.

UNCERTAIN YET POSITIVE

Despite the very encouraging figures, this year could possibly have been even better. This is the view of Alberto Berjmejo, a partner with Magnum Capital. He said, ‘In the world of private capital we expected more of the year because of the abundant liquidity and the positive evolution of the Spanish economy.’

In all this, the effects of the Brexit referendum remain a bit of an unknowable quality. How that will impact on this kind of activity going forwards could depend on how Britain subsequently proceeds with its exit from the EU which is still a matter of contention in the UK. Hesitation is also thought to have been caused by the political uncertainty Spain underwent for a period this year.

Even though Spain may well have done better in 2016 under more favourable conditions, all of the above points to very positive forecasts for 2017. Juan Orbea, head of M&A for Santander explained this positive outlook saying, ‘There are a lot of operations that were stopped and [are now] going to come out or will be closed in 2017.’

This year, conference organizing partners TTR produced a handbook helping to guide parties through the intricacies of M&A deals.

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

Comments are closed.