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Year in review

Since March 2020, the approach to FDI has shifted from the general principle of liberalisation of investments to a more restrictive approach, by which certain transactions require prior approval, ultimately seeking to protect key strategic sectors of the Spanish economy.

Major developments during the past year include an extension of the temporary regime applicable to EU/EFTA residents (for the second time since its implementation) until 31 December 2022, as well as a public consultation on the draft proposal of the implementing regulation. However, there is currently no visibility as to the result of the consultation or the timing for it to be implemented formally. Public sources nevertheless indicate that its approval is expected in the coming months.

Although the ex ante screening mechanism has resulted in an increased level of red tape for investors compared with the previous system, public sources indicate that most of the transactions reviewed during 2021 were cleared unconditionally.4 In fact, during 2021, only 48 transactions required prior authorisation (i.e., only 18 per cent of the transactions reported under the screening mechanism). Although all of these were ultimately cleared, six transactions were cleared subject to remedies.

Key investments cleared under the FDI screening mechanism from June 2021 to June 2022 include the following:

  1. Glovo's acquisition by Delivery Hero. The transaction concerned the acquisition of one of the leading delivery companies in Spain by the German delivery platform Delivery Hero. According to public sources, clearance was made conditional on Delivery Hero honouring the relevant labour regulations applicable to riders in Spain.
  2. The acquisition of Igenomix, a Spanish company active in reproductive genetic testing for in vitro fertilisation clinics, by the Swedish company Vitrolife.
  3. Cobra's acquisition by Vinci. The transaction concerned the acquisition of the ACS Group's energy branch by the French company Vinci, which is active in the concessions, energy and construction sectors.
  4. Masmovil's takeover bid for Euskaltel, a Spanish telecommunications operator. The transaction fell under the FDI screening mechanism owing to Masmovil having foreign shareholders.
  5. IFM's takeover bid for a stake of up to 22.69 per cent in Naturgy. This is one of the main Spanish energy companies and has significant distribution networks in Spain. The transaction was cleared in early August 2021 subject to remedies. These remedies seek to ensure the stability of the company, and to protect its critical assets and infrastructure.

In practice, the application of the FDI screening mechanism has spanned a multitude of industries, such as telecommunications, pharmaceuticals and life sciences, financial services, software and information technology services, delivery platforms, renewable energy, mining and the utilities sector.

In this climate, foreign companies that envisage transactions involving Spain should seek FDI advice at an early stage of planning the proposed investment, especially in strategic sectors that have already been subject to scrutiny and that will presumably continue to attract the attention of authorities going forward.