Technology M&A 2026 Comparisons

The technology M&A market is expected to be very active in 2026. In addition to more traditional technology sectors, such as software and digital development, increased activity is anticipated in defence technology, artificial intelligence and biotech.

Delays in deal closings have contributed to a strong pipeline (that is, the sequence of events in the acquisition process) for 2026.

Start-up companies are commonly incorporated in Spain, which is generally considered an attractive jurisdiction for entrepreneurs. This is largely due to the availability of certain tax benefits and a high quality of life, while other key incorporation parameters are broadly comparable to those of other EU jurisdictions.

A limited liability company is the option most often recommended to initiate a business in Spain.

Early-stage financing is typically provided by founders’ close networks, including friends and family, as well as informal angel investors. Follow-on is typically financed by local investors and family offices, together with more professionalised investors included in the ecosystem. Grants and government debt also play a relevant role at early stages.

Funds and venture capital firms are largely established and active in Spain.

Standard practices for venture capital documentation are well developed in Spain.

Changes in corporate form are effected by driven access to the needs of capital markets. In Spain, only SAs (open forms of limited liability company) can go public, while SLs, (closed forms of limited liability company) are preferred at early stages.

Initial Public Offerings (IPOs) are marginal and usually reserved to larger-sized companies, despite the existence of easier new ways to access public capital markets. This trend is expected to accelerate in the future.

Both national and foreign listings coexist in Spain. Companies may choose to pursue either or both of these options, depending on market costs and their growth strategy.

The decision to list on a foreign exchange will certainly have an impact on future transactions and  this choice is often based on the applicability of such mechanisms as squeeze-out rules.

Most low and mid-low market deals are usually bilateral negotiations. As companies increase in size, selling by means of auctions will allow a higher price to be obtained.

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When a privately held technology company is sold, full divestments of national venture capital funds (VCs) are typically seen, while founders are usually offered roll-overs or retained with earn-out schemes.

The choice between cash, shares or a combination of both largely depends on the buyer’s strategic plans for the target, in particular whether the business is intended to be fully integrated into a larger group or focused on further growth.

Founders and venture capital (VC) investors are usually expected to provide representations and warranties (R&Ws) post-closing. For identified potential damages, specific indemnity policies, together with price retention, including escrow deposits, are commonly preferred.

Spin-offs are expected to take place in Spain in 2026. The key drivers for pursuing a spin-off are:

• cutting off risks associated to innovation developments;
• allowing a faster deployment pace;
• separating consolidated business from new ventures; and
• allowing remuneration schemes to attract new talent.

Tax deferment schemes are available in Spain, subject to certain formalities and legal requirements.

It is possible for a spin-off to be followed immediately by a business combination and this is not a rare occurrence. Foreign Direct Investment (FDI) or regulatory rules stipulate that a spin-off followed by a merger will require shareholder majorities.

No ruling from tax authorities is required to complete a spin-off. Competition defence authorities may intervene, depending on the market dominance of the parties concerned. In addition, strategic industries such as those having an impact on national security may need to obtain prior authorisation, including according to FDI rules.

It is commonplace in Spain to acquire a stake in a public company prior to making an offer. Transactions in Spanish listed companies which reach, exceed or fall below the 3% thresholds must generally be notified. The threshold is reduced to 1% if the person obliged to report resides in a non-co-operative or zero-tax jurisdiction.

The notification must be made within a maximum period of four trading days  from the date when the thresholds are reached.

A mandatory offer is required when a person gains control over a listed company (control of 30% of voting rights or when more than half of the board of directors is appointed within 24 months). In the case of indirect or sudden control takeovers (eg, capital reduction, own shareholdings), the offer must be made within three months of the determining event.

The acquisition of a listed company is typically carried out through a public offer, which may be voluntary or mandatory. As mentioned under 6.2 Mandatory Offers, it is mandatory when control of the listed company is achieved, generally by exceeding 30% of the voting rights or by appointing more than half of the board of directors within 24 months.

Other acquisition structures include indirect or unexpected takeovers (for example, through a merger or control takeover of an entity that holds shares in a listed company).

There is no one-size-fits-all approach. The choice depends on market factors, group structure, financing, taxation, and control objectives.

It is permissible to use cash in a merger through complementary compensation in cash boot (that is, to equalise the value), but with a limit for the tax neutrality regime to apply: it cannot exceed 10% of the nominal value of the shares allocated in the exchange.

There is no general legal minimum price for a takeover offer/business combination; principles governing valuation, information, reporting, and, where applicable, protection of shareholders and creditors apply. For mandatory offers, the consideration must be fair, with specific rules for determining this.

The most common price adjustment and contingent price mechanisms used to cover valuation uncertainties are typically earn-outs, milestones, and cash/debt/working capital adjustments.

Typical conditions in a takeover offer mainly focus on:

• minimum acceptance;
• corporate agreements of the target company or the offeror; and
• regulatory approvals, particularly in relation to competition.

Regulators severely restrict the use of conditions in mandatory tender offers, except as provided for authorisations relating to competition. In voluntary tender offers, the regime is more flexible and allows conditions within the legal catalogue and under the control of the Spanish National Securities Market Commission (CNMV).

The usual practice is to agree on negotiation phases and documents, based on a Letter of Intent (LOI) setting out the transaction's minimum conditions subject to verification. In a takeover offer, the procedure is highly regulated, with a focus on the submission of the prospectus and supporting documentation to the CNMV, which in practice is co-ordinated with private agreements.

There is no “minimum acceptance condition” to trigger the obligation in mandatory offers, because the obligation arises from gaining control of the listed company. In voluntary offers, it is typical to make effectiveness conditional on a minimum verifiable acceptance at the end of the period, to ensure that the offeror achieves the target level of control and to avoid a result of insufficient participation.

Where the offer is for the entire share capital, the legislation links subsequent squeeze-out and sell-out rights to the offeror acquiring at least 90% of the voting capital and the offer being accepted by at least 90% of the voting rights targeted, excluding those already held by the offeror in the legal case.

In takeover offers, proof of the guarantee of payment (in cash or securities) must be provided, normally by means of a bank guarantee or deposit/allocation of funds, in accordance with the terms required by the applicable regulations and verified by the CNMV. As a rule, it is not necessary to provide executed financing documents with bank certification.  The financing banks are not offerors by virtue of their financing.

The target company may agree break-up fees in favour of the first offeror, with a limit of 1% of the total amount of the offer and subject to the requirements of approval by the Board of Directors, a favourable report from the financial adviser and disclosure in the explanatory prospectus.

The Spanish framework links governance rights to the notion of control of the listed company. If control is not achieved through the holding of the percentages provided for by law, control may also be achieved through concerted action by means of shareholders' agreements.

In transactions involving listed companies it is common to seek commitments of support and action from relevant shareholders to ensure the successful completion of the transaction. These commitments may even be structured as shareholders' agreements, which may include advance acceptance of the takeover offer and obligations to vote in a manner consistent with the transaction.

Its nature is essentially contractual, aimed at co-ordinating the exercise of political rights and, where appropriate, regulating the transfer or maintenance of shareholdings, including lock-up periods to ensure market stability and confidence, especially in Initial Public Offerings (IPOs).

The offer must request authorisation from the CNMV before its public and general disclosure. The review and authorisation are governed by a general period of 20 business days, calculated from the date the CNMV receives the complete application or, if documents are provided later or there are other requirements, from the date of their registration or submission.

The CNMV authorises or rejects the offer after examining the prospectus and documentation and may request additional information. After authorisation, the offeror must publish the offer within five business days, and the acceptance period is set by the offeror within legal minimums and maximums.

The offer may be structured in such a way that it is conditional upon the authorisation or non-opposition of the competition authorities, with notification to those authorities being certified to the CNMV when necessary.

The acceptance period is set by the offeror in the prospectus, with a minimum of 15 calendar days and a maximum of 70 calendar days, calculated from the trading day following the publication of the first announcement.

The offeror may extend the period initially granted, after notifying the CNMV, provided that it does not exceed the maximum of 70 days, and announcing it in the same media at least three calendar days before the end of the initial period.

The CNMV may agree to extend the period in other cases when necessary, with a reasoned decision and for the sake of the successful completion of the offer and the protection of the recipients.

The incorporation and commencement of activity of a technology company is not, generally, subject to prior authorisation, although there are regulated technology sectors in which administrative authorisation or specific registration is required before operating.

In regulated financial services, the CNMV may intervene for investment services companies and crowdfunding service providers, and the Bank of Spain for payment institutions and electronic money institutions.

In telecommunications, the start-up requires prior notification to the Register of Operators, with a maximum period of 15 working days for the Register to verify the requirements. In crowdfunding, authorisation is decided within a maximum of three months.

In payment institutions and electronic money institutions, the period is three months with a presumption of rejection if no response is received, and in investment services companies, the authorisation period is six months, with a presumption of rejection if no response is received.

To provide crypto-asset services, authorisation as a crypto-asset service provider is generally required, and services cannot be provided without authorisation. The competent authority must acknowledge receipt of the application within five business days, verify its completeness within 25 business days, and, once complete, issue a reasoned decision within 40 business days, notifying the decision within five business days.

The main regulator of the securities market with supervisory, inspection, and sanctioning powers over actions related to corporate transactions that impact securities markets, including acquisitions of control and takeover offers in the context of M&A, is the National Securities Market Commission (CNMV).

A general principle of liberalisation of foreign investment applies, but there is a mechanism of control and prior authorisation, of a suspensive nature, for certain foreign direct investments in strategic sectors and in cases related to public safety, public health and public order.

For investments by EU and European Free Trade Association (EFTA) residents in certain Spanish companies, the suspension of liberalisation is maintained on a transitional basis until 31 December 2026, for transactions involving listed or unlisted companies with investments exceeding EUR500 million.

Foreign investments in Spain are generally subject to formal and informative controls, articulated through a declaration to the Investment Registry. The declaration to the Investment Registry is mandatory and, in general, must be made after the investment has been made and divested.

When the liberalisation regime is suspended, the transaction is subject to prior authorisation. In such cases, transactions carried out without authorisation are invalid and have no legal effect until they are legalised, and the investor cannot exercise economic and political rights until authorisation has been obtained.

There is a screening procedure based on security, public order, and public health grounds that may subject certain acquisitions to prior administrative authorisation when they involve a stake of 10% or more or the acquisition of control, in accordance with the criteria of the competition law, and fall within strategic sectors (critical infrastructure, critical and dual-use technologies, essential inputs, sensitive information, and media).

Specific restrictions remain in place, based on the origin or profile of the investor, including cases involving investors from third countries, control by third-country governments, or the risk of illegal activities. Separately, there are sectoral controls for investments in activities related to national defence and weapons and explosives for civilian use.

At Spanish national level, concentrations that meet at least one of the following thresholds must be notified to the Spanish authority:

• acquisition or increase of a market share equal to or greater than 30% in the relevant market in Spain or in a defined geographic market within it; or
• total turnover in Spain of the parties exceeding EUR240 million, provided that at least two of them individually generate more than EUR60 million in Spain.

There is a specific exemption when only the 30% market-share threshold is met and the turnover in Spain of the acquired company or assets does not exceed EUR10 million, provided that the participants do not have an individual or joint market share of 50% or more in the affected markets.

In acquisitions with continuity of activity, the starting rule is business succession, which requires the new employer to assume the labour and Social Security rights and obligations, maintaining the conventional regime unless otherwise agreed, and preserving, if there is autonomy, the legal representation mandate.

The general system of information and consultation rights of the works council on business decisions involving significant changes in work organisation and contracts, including merger or takeover processes with an impact on employment, takes on particular relevance.

The free flow of capital and economic transactions with foreign countries is a general principle, without prejudice to limitations imposed by safeguard clauses and sectoral regimes.

In an M&A transaction, it is not usual to require approval from the Bank of Spain for “exchange control,” but the following may apply:

• prior authorisation for control of foreign direct investment in strategic sectors or in cases of risk; and, where applicable,
• sectoral administrative authorisations when the target is a regulated entity, such as banks, insurance companies, investment services companies, payment institutions, or electronic money institutions.

During the period from 2023 to 2026, the most significant regulatory change for M&A activity in technology has been the approval of the new framework for corporate restructuring through Royal Decree-Law 5/2023, transposing Directive (EU) 2019/2121 and extending European solutions to the domestic sphere to avoid regulatory asymmetries.

In terms of relevant technology M&A case law, the Supreme Court's doctrine on the transfer of a branch of activity for consideration is decisive in determining when an acquisition should be structured as a structural change and when it can be configured as a single asset transfer.

In technology M&A due diligence, it is important to verify that the target has risk analyses and security measures in line with the General Data Protection Regulation (GDPR), especially in start-up or tech SME environments, where the obligation to adopt measures and assess risk before contracting tools or applications is emphasised.

The practice also incorporates the examination of incident management and IT audit evidence, due to its role in identifying vulnerabilities and preventing legal risks associated with the use of IT, aligning with sectoral network and system security obligations for certain operators, which require proportionate measures and documentation of security policies.

The listed company may provide bidders or potential bidders acting in good faith with non-public information in the context of due diligence, but if it does so during the search for competing offers, it must preserve equal access to information, providing each bidder with the same information when specifically requested and necessary to formulate the takeover offer, subject to confidentiality and exclusive use for the purpose of preparing the offer.

Due diligence for a technology company is limited by compliance with the General Data Protection Regulation (GDPR) and Ley Orgánica (LO) 3/2018, which require that any review of personal data have a legitimate basis, respect the limitation of purpose, and apply minimisation and confidentiality.

There may be significant practical restrictions when the target uses biometrics, geolocation, or video surveillance, as these are particularly intrusive forms of processing and, in the case of biometrics, special categories and high-risk requiring Data Protection Impact Assessment (DPIA). In M&A operations, the communication of data may be presumed lawful if it is necessary for the operation and continuity of the service, and the data must be deleted if the operation is not completed.

The decision to make a voluntary takeover bid must be made public and disclosed as soon as it is adopted, and only after the bidder has ensured the full availability of the cash consideration or has taken reasonable steps to guarantee any other consideration. In the case of a mandatory takeover bid, it must be published and disclosed immediately once the obligation is triggered.

The general rule is that securities may only be offered to the public or admitted on a regulated market after the prior publication of a prospectus. In a takeover bid, the key document is the offer prospectus. When the consideration consists of securities issued or to be issued, the offeror may choose to include in the takeover bid prospectus information equivalent to that required in an IPO or public offering, or to incorporate by reference an authorised and current prospectus in accordance with the prospectus regime applicable to public offers or admissions to listing.

The offeror must provide the CNMV with an audit of its financial statements, at least for the last closed or approved financial year. If the offeror is a Special Purpose Vehicle (SPV) with no activity or created for the offer, the required audit is transferred to its shareholders or controlling partners. If, in a takeover bid, the consideration consists of securities already issued by a company other than the bidder, the audited financial statements of the issuing company, at least for the last financial year, and documentation proving its incorporation and articles of association must also be provided, unless previously deposited with the CNMV.

The parties must submit the core documentation of the M&A transaction to the Commercial Registry when it is structured as a structural change (eg, a merger or spin-off), because the application for the prior certificate and registration require the submission of the project and the legally required reports, in addition to the public deed.

If the transaction is a sale of shares or assets, the Commercial Registry does not generally require the private contract to be filed, although for tax purposes it may be necessary to provide a copy of the public deed or equivalent document in the communication of the special regime and, in addition, the tax authorities may require due diligence reports due to their tax relevance.

The main duties of directors in a business combination or structural modification revolve around the duty of diligence and the duty of loyalty, acting with the diligence of a prudent businessperson and in the best interests of the company, with the right and duty to gather the information necessary to make decisions.

In strategic and business decisions, they are protected by business discretion if they act in good faith, without personal interest, with sufficient information and following an appropriate procedure.

In the specific context of structural modifications, directors assume enhanced disclosure duties and must prepare a report by the administrative body for shareholders and employees explaining and justifying the legal and economic aspects of the transaction and its consequences, making it available at least one month in advance and, where appropriate, incorporating the opinion of the employees' representatives.

In a merger, they must also ensure that the relevant corporate documentation is made available and must communicate any significant changes in assets and liabilities between the draft and the shareholders' meeting.

In business combination transactions, it is common for the board to set up special or ad hoc committees to conduct the analysis and negotiation of the transaction and reinforce the independence of the process.

When there is a conflict of interest (or a significant risk of conflict) involving one or more directors, these are used to ensure that the matter can be examined and, where appropriate, negotiated by a more independent body, with the directors concerned abstaining from deliberations and voting on matters that affect them.

The board of directors can, and often does, actively participate in the negotiation of an M&A transaction as part of its management duties, but its scope for action is limited by specific rules in takeover offer scenarios, due to the duty of passivity, which requires prior authorisation from the board for actions that could prevent the success of the offer, with the exception of seeking competing offers.

In takeover offers, the board must also issue a reasoned report on the offer. Corporate litigation challenging board resolutions is common, and judicial review is limited to legality and corporate interest, not business expediency. For the buyer, the key considerations are to anticipate challenges based on conflicts of interest and board malfunctioning, and to structure the process to uphold the decision-making process under business discretion, where appropriate.

In takeover operations and business combinations, it is common for directors to rely on financial and technical-economic advice provided by entities/professionals specialising in investment services, and advice on corporate financing strategy in insurance or placement contexts, with enhanced duties of disclosure and conflict control. Experts are required to give their opinion on the fairness of the exchange ratio or compensation and valuation methods.