Mergermarket, an independent mergers and acquisitions intelligence and data service, owned by the Financial Times, hosted its sixth annual Iberian M&A Forum in Madrid.
Iberian dealmakers are confident of a rise in investment into the Latin American market. The event will look at the strategies that firms are exploring to drive deals of that nature in 2013 and the challenges that may be faced in doing so.
Mergermarket’s Spanish Bureau Chief, Rupert Cocke said: “Spanish companies have a long track record of investing inLatin America, with varying degrees of success. Opportunities in the fast-growing Brazilian market are a hot topic asSpain’s own growth continues to stall.”
Even though the number of deals being announced in Iberia were at their lowest in nearly a decade in 2012, 296 deals valued at EUR 48.6bn, according to Mergermarket data, there were still more deals being made than in the four years preceding the upward trajectory that begun in 2005.
A common deal driver for firms buying Iberian companies have been on the back of the unfortunate economic situation – as seen by the bellwether of M&A activity in Iberia being the Financial Services sector for the past two years and most likely for 2013 also.
Fernando Torrente, Coordinator for Corporate and Commercial practice at Cuatrecasas, Gonçalves Pereira said: “It is true that we are facing difficult times inSpain, but it is also a moment to appreciate the willpower of our companies and of the Spanish people. Politicians, executives, advisers and the general public are all determined to get through the bad times. I strongly believe that this situation will be resolved and that our companies and economy will stronger once that happens."
Juan Rivera, Partner at LLORENTE & CUENCA, said: “although the volume of deals registered in the Spanish market are currently at very low levels, Spanish companies international activity continue to grow, particularly in the Latin American market, its natural geographical area. In addition, it is worth noting howSpainis becoming the European gateway for some Latin American companies.”
Key deal drivers include deals to consolidate or deconsolidate debt and the entry of foreign investors, according to Mergermarket data. China’s HNA group acquired Spanish hotel chain NH Hotels for EUR 234m and another deal saw Algerian National Company for Hydrocarbons joining with Compania Espanola de Petroleo to purchase a 20% stake in Medgaz from a debt laden Iberdrola –a company that has been gradually selling assets since 2009.
The highest valued deal so far this year, according to Mergermarket data, sees Singaporean Temasek Holding increase its holding in Repsol by 5% for EUR 1bn (it now owns 6.3%). This deal was the first approach from a Singaporean company since Asian companies became interested inIberia’s Energy sector in 2002 and also the largest value paid by any Asian company in the Iberian Energy sector. It has also pushed Energy, Mining & Utilities up to the highest valued sector so far in 2013 for only six deals (EUR 2bn), two thirds of the entire deal value in this sector during 2012.
The Iberian M&A forum attracted over 200 delegates from an audience of corporates, private equity funds, creditors, financial advisers and lawyers.