Madrid, 30 May 2018: Mergermarket has reported that political and economic stability in the country has led Spanish M&A to sky-high figures in 2018. The €32.1bn takeover of Abertis by ACS and Atlantia propelled the country’s M&A to €46.7bn (113 deals), surpassing 2017’s full-year total of €42.4bn. Cheap financing and continued strong economic performance have helped dealmakers sign blockbuster transactions which have seen some of the region’s largest companies change ownership. The data was announced at 11th edition of the the Mergermarket Spanish M&A and Private Equity Forum held in partnership with Cuatrecasas and Santander Global Corporate Banking at the Casino De Madrid, a leading event in which market players, such as private equity houses and investment banks analyse the M&A market, as well as its opportunities and trends.

The aforementioned Abertis acquisitions became the second largest deal targeting Spain since 2007. However, even excluding the takeover, Spain still recorded strong figures of €14.6bn across 113 deals – the highest YTD figure since 2011 (€30.1bn). Juan Orbea, head of M&A, Iberia, at Santander Global Corporate Banking said: “We are seeing significant interest in strategic acquisitions from corporates aiming to create value through rebalancing their portfolio of business or accessing new markets. Financial Sponsors keep on driving investment, particularly in light of the newly raised funds and the increasing interest in mid-market investments. We are confident that M&A activity in Spain will continue to deliver strong numbers in 2018”.

Companies in the Energy, Mining and Utilities sector attracted a number of important deals accounting for almost 20% of overall activity in the region. The sector saw three deals above the €1bn mark including the acquisition of a 20% stake in Gas Natural Fenosa by Corporación Financiera Alba and CVC Capital Partners from Repsol for €3.8bn. Activity has largely been driven by high levels of foreign investment due to strong economic growth in Spain underpinning an active M&A market and more stable commodity markets. “A more stable economic environment has driven Spanish M&A to the sky-high figures seen this year and there appears to be no reason why this optimism should not carry forward into H2” commented Jonathan Klonowski, EMEA Research Editor at Mergermarket. 

Javier Villasante, coordinator of the Cuatrecasas Corporate and Commercial Practice in Madrid emphasised: “M&A activity in 2018 is keeping the same trends that we saw in 2017, with a continuous boom in real estate and renewable energy, and increasing levels of deal-making activity in virtually any other sector. Availability of cash and extraordinarily low interest rates still fuel the M&A market, in a sellers’ market with higher and higher purchase prices.”

The real estate sector, long one of the country’s most vital sectors to the economy, has seen healthy levels of investment in recent months. The sector saw its highest level of M&A since the crisis in 2017 (€7.4bn) and this year has started off on the same footing with €2.8bn announced so far. Having already seen the listing of Metrovacsa this year, real estate is also likely to dominate the IPO Pipeline with listings of Via, Celere, and Testa expected by dealmakers.

Private equity buyouts stand at their highest year-to-date value on Mergermarket record with 25 buyouts amounting to €6.7bn announced. Private equity activity is likely to continue into the second half of the year as PE firms look to deploy their dry powder and take advantage of low interest rates ahead of the planned hikes already announced by central banks. In addition, local funds Alantra, Magnum, ProA or Portobello all plan to exit some of their Spanish investments. A number of ongoing deals involving PEs – including Ufinet, Maxam and Bimba y Lola are heading for conclusion this year. 

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Olivia Cummins, PR Executive EMEA
Acuris
T: +44 (0)20 3741 1129
E: Olivia.cummins@acuris.com 

Olivia Cummins PR Executive Acuris