Corporate M&A 2023

Last Updated April 20, 2023


Trends and Developments


Deloitte Legal SLP has a specialised service in corporate and M&A composed of more than 70 professionals led by eight partners. The firm’s lawyers have solid experience in advisory processes in M&A procedures, covering all the milestones of a transaction. Deloitte Legal’s multidisciplinary approach, industry specialisation and global network, present in more than 150 countries, provides the complete range of M&A transaction services, including expansion processes, alliances and divestitures which present a wide range of legal, tax, regulatory and other issues that may lead to the success or failure of the investment. Clients benefit from Deloitte Legal’s extensive experience of corporate and M&A, understanding of the PE/VC markets and industries and close collaboration with colleagues in other disciplines within the Deloitte global organisation.

Trends and Legal Considerations for M&A Activity in Spain


This article will present an overview of the market, trends and legal considerations as well as an outlook for the future, all in relation to M&A activity in Spain. The topics discussed within this chapter are not intended to provide a thorough analysis of each case, but rather some guidelines to enable the reader to understand and visualise the main trends and their impact in the M&A market from a practical standpoint.

Market activity

In 2022, the year began with great expectations for the Spanish M&A market, following 2021 witnessing record volumes of deals (largely due to the COVID-19 effect and the standstill suffered during most of 2020). However, on 24 February 2022, with the invasion of Ukraine by Russia, this scenario changed.

M&A activity experienced a slowdown in the number of deals closed during 2022, particularly during the second half of the year: rising interest rates, inflation, the energy crisis and the economic slowdown are factors that explain the caution of many investors during most of the year.

M&A in 2022

Although the number of M&A transactions announced in Spain during 2022 was slightly higher than in 2021, in terms of value the market activity declined by 29% due to fewer large deals (so-called megadeals). In fact, the situation of uncertainty during 2022 has left several megadeals pending, mainly due to the need to renegotiate leveraged transactions in the face of rising interest rates.

According to the annual M&A report of TTR Data for 2022, the Spanish M&A market accounted for a total of 3,060 transactions (representing an increase of 0.36% with respect to the total number of transactions in 2021), implying that the aggregate deal value (EUR108.07 billion in 2022) decreased by more than 11% with respect to the same data regarding 2021. This report also shows that, among the sectors involved in M&A transactions during 2022, real estate was the most active one, with a total of 647 transactions (an increase of 23% with respect to 2021), followed by the internet, software and IT services sector (362 transactions), the renewable energy sector (224 transactions) and the travel, hospitality and leisure sector (178 transactions).

Among other deals, the following are highlighted.

  • Private equity – Private equity continued being a major driver of M&A in 2022. Despite the context of macroeconomic uncertainty, all previous records have been broken, maintaining the dynamism of 2021, with another historic year in the middle market. 2022 closed as the second-best year for private equity with EUR7,257 million in 190 investments, a volume surpassed only in 2019, when EUR7,805 million was recorded in 172 transactions. In this context, one of the largest M&A deals was executed by Carlyle, which announced in October the acquisition of Garnica for approximately EUR500 million.
  • Venture capital – 2022 ended as the second-best year ever, both in terms of volume (EUR1,478.5 million) and number of deals (745), compared to 2021 (EUR2,108 million in 773 investments). International venture capital, once again, achieved record highs in investment in 2022 (EUR1,033 million in 138 investments), behind only 2021 (EUR1,670 million in 184 investments).
  • Hotels – The investment in Spanish hotels reached EUR3,279 million in 2022, exceeding the figure recorded in 2021 by 3.1%. Throughout the year, significant hotel portfolios and some prime unitary assets were transacted. When compared to 2021, the portfolio investment figure increased by 9%.
  • Transport and logistics – This industry has also attracted a great deal of investors’ interest (both corporate and financial investors). From a reputational point of view, the sector has been strengthened by COVID-19 and it has also proved to be quite resilient.

During 2022, and despite the supply chain crisis that struck the market, operators within transport and logistics attracted some of the investors’ attention, particularly in the market segment of temperature-controlled infrastructures and transport. In January 2022, Ontime completed its acquisition of Acotral and its subsidiaries Transportes Yagüe and Tum Capilar. Two months later, American investment firm Apollo Infrastructure and the main shareholders of the company Primafrio reached an agreement for the acquisition by Apollo of a 49% stake in the temperature-controlled infrastructures and transport company. In July and August, respectively, Logista closed the acquisition of Transportes El Mosca and the North American group Lineage, through its Dutch-based subsidiary Lineage Logistics, acquired the company Grupo Fuentes, in a deal that was led (from the sellers’ side) by Deloitte, which acted as legal, tax and financial advisers of the shareholders of the target entity.

  • IT infrastructures – Following growing investments linked to the IT networks at high valuations at the end of 2021, the appetite of private equity firms in IT companies continued in 2022, with special attention to large trunk lines or deployments of “fibre to the home” (FTTH), with a valuation boom that sometimes led to more than 27 times EBITDA.

In the period between January and July 2022, the main transactions affecting IT infrastructures were the acquisition by the French private equity firm Ardian of 80% stake in the share capital of Adamo from EQT Partners, for a total deal value exceeding EUR800 million and the acquisition of Lyntia Networks by Axa and Swiss Life.

  • Renewable energy infrastructures – Notwithstanding the rising interest rates and inflation, M&A transactions in the renewable sector have continued growing and, despite dropping by 24% (due, according to Enerdatics, to the complex regulations for permits for new facilities) in 2022 after extraordinary numbers in 2021, they are expected to rise again during 2023.

Current trends

Market uncertainty and change of trends in M&A transactions

The trend initiated after the pandemic, whereby the fragility of global supply chains (especially in certain sectors such as manufacturing) has become evident, continued in 2022, caused by factors such as:

  • shortages of certain raw materials and semi-manufactured products (such as microchips and other semiconductors), which have led to delays in delivery deadlines, production stoppages and corresponding price increases;
  • significant increases in energy prices (which became more evident after February 2022 as a result of the Russia-Ukraine conflict); and
  • tensions across global trade channels and logistics networks, in particular, maritime transportation, leading to increased transportation costs.

This supply chain crisis, together with global uncertainty caused as a result of the Russia-Ukraine conflict, and the rise of interest rates and inflation, are having an impact, to a greater or lesser extent, on the business activity of companies and, consequently, on the M&A market, including the following.

  • Vertical integration – Global uncertainty in the market has exposed new threats to traditionally stable companies, especially in the areas of logistics, commodity prices and energy. This situation highlighted the desirability of recourse to acquisitions to adopt vertical integration strategies with the purpose of gaining greater control over the value chain and improving efficiency or of strengthening the company’s market positioning. These actions aim to acquire the highest degree of self-sufficiency possible and avoid, as far as possible, dependence on third parties.
  • New trends in the use of different types of M&A processes – The twist towards a more pro-buyer (or, more precisely, a less pro-seller) M&A environment as a result of market instability and uncertainty as to how businesses may evolve in the near future, has led to investors starting to gain a more predominant role when negotiating M&A deals with sellers. Tender processes or so-called beauty contests, whereby a large pool of potential investors are required to stick to the seller’s demands in order to have a chance of being chosen as preferred investors to close the transaction, are increasingly shifting towards bilateral or less competitive processes (with a pool of just two or three bidders), being the preferred negotiation structures for both sellers and buyers. In such scenario, bidders tend to look for exclusivity from sellers in order to increase the probability of success in the transaction and to justify costs arising from a more thorough analysis and valuation of the target company.
  • Dilation of M&A processes – It being difficult to foresee the behaviour of the market and the specific impact on the business plan of each company, it now takes longer for investors and sellers to agree on the price/value of M&A transactions since usually there is a big differential between the seller’s expectations and the price the buyer is willing to pay. Those circumstances lead to longer due diligence processes in order to enable investors to perform an in-depth review of target companies (by sometimes covering longer periods of financial review) so as to ensure an adequate valuation of the target’s business and potential contingencies. As a result thereof, negotiations are prolonged over time, new offers need to be re-analysed by the seller to fit the price, and the structure that the buyer proposes may be subject to changes during the course of negotiations.
  • Alternative investment structures – Market uncertainty and the lack of confidence of investors in the financial performance of certain target companies have led investors to resort to alternative investment structures aiming at assuming a lower risk without losing the opportunity to invest in companies which, a priori, have great market potential. In this regard, the market currently offers alternative transaction structures, which may be more attractive to investors, such as the acquisition of minority stakes (including the possibility of acquiring majority stakes or even 100% of the target in the event of a favourable evolution of financial results), hybrid equity/debt (in relation to debt acquisition, an increasing number of transactions are being financed by debt funds instead of traditional credit institutions) or preferred equity vehicles.
  • Market consolidation– The exception to a pro-buyer market in 2022 is clearly found in those markets that are highly atomised and where consolidation is, in itself, an investment opportunity. Deloitte Legal has been very active advising both buyers and, especially, sellers, with regards to the following.
    1. Acquisitions of insurance brokerage firms, both by industrial investors (other national and international brokerage firms) and, above all, by national and international private equity firms. M&A transactions in this segment are being closed at very interesting multiples, above ten times EBITDA. For this purpose, national brokerages themselves are planning these new transactions through inorganic growth with the corresponding acquisition of smaller portfolios of collaborators or small brokerages. All these deals generally count on the approval of the General Directorate of Insurance (Dirección General de Seguros), who is authorising them in an agile way and without exhausting the legal period of three months.
    2. Market consolidation transactions, which have also been usual in the automotive segment, both by companies producing accessories, complements or spare parts, as well as by spare parts distribution companies.

Alternative mechanisms to determine the purchase price and variable payments

The uncertainty of events that could significantly impact the course of a transaction has led both buyers and sellers to gain experience in the use of alternative ways to overcome valuation uncertainties and facilitate the closing of transactions. Most M&A transactions closed during 2022 did not include a locked-box pricing mechanism and, therefore, sought to keep the risk of the business with the seller until the closing of the transaction.

In contrast to the non-use of locked-box mechanisms as a way to determine the purchase price, the use of closing or completion accounts increased considerably and, therefore, the purchase price of most transactions was set on the same date as the closing took place (by reference to the target company’s financial statements closed as of the closing date). This, in turn, led to an increase in the use of price adjustment mechanisms. By way of example, some of them are explained below.

  • Ordinary adjustment mechanism between the price initially paid by the buyer (based on the estimates agreed upon between investor and seller) and the final price resulting at the closing date, after the corresponding review by the parties of the financial statements of the company at that date. This review occurs post-closing and, therefore, the corresponding review procedures and mechanisms and how discrepancies should be settled need to be included within the wording of the sale and purchase agreement (SPA).
  • Invoice adjustment mechanism. In deals where the target is a services provider company, additional mechanisms are being included for the purpose of adjusting amounts in the following cases: (i) in the event that the target company receives invoices from suppliers corresponding to purchased goods or received services and not provisioned as invoices pending receipt in the company’s closing accounts; and/or (ii) invoices issued to customers for services rendered prior to the closing date should be negatively rectified or provisioned for, because they have not been collected within an agreed maximum period from the invoice date and whose rectification was not provisioned as invoices pending issue in the company’s closing accounts; and/or (iii) services should be rendered to customers after the closing date corresponding to invoices previously issued and whose liability was not duly provisioned in the deferred income account in the company’s closing accounts.
  • Adjustment mechanisms for non-recurrence of EBITDA considered for closing. Transactions have been encountered whereby a price adjustment mechanism is included so that, in the event that in the years following the closing, the target company fails to repeat the EBITDA considered for the closing of the transaction, a price adjustment is made in proportion to the difference between the future EBITDA and the EBITDA considered at closing. Such adjustment mechanism is included in deals where it is crucial that the seller remains managing the target company.

Likewise, the inclusion of deferred variable payments such as earn-out payments and other alternatives is becoming increasingly common in M&A transactions, as a way of trying to minimise the future risk of the investment and to match the value intention between buyers and sellers.

In this context, the year 2022 has seen a clear increase in the use of earn-out mechanisms, linked to the future performance of the company via (i) compliance with certain objectives such as growth targets, portfolio maintenance, etc; and (ii) future EBITDAs, etc.

Foreign direct investments

As a consequence of COVID-19, in March 2020 the Spanish legislator amended the legal regime applicable to foreign investments so as to impose restrictions on foreign direct investments in Spain, suspending the previous deregulation regime. In particular, the new regime imposed by Royal Law-Decree 8/2020, of 17 March, established a new legal regime where foreign investments in certain so-called strategic sectors, or investments (even in non-strategic sectors) made by foreign investors fulfilling certain requirements, were subject to prior administrative approval. 

For the purposes of the relevant law, “Foreign direct investments” are understood as those made (i) by investors resident in countries outside the European Union (EU) and the European Free Trade Association (EFTA), or (ii) by residents of EU or EFTA countries whose beneficial ownership (meaning more than 25% stake in the share capital or voting rights of the relevant investor, as well as any other means of direct or indirect control over such investor) corresponds to residents of countries outside the EU and EFTA, or (iii) by residents of countries inside the EU and EFTA in listed companies in Spain, or in Spanish unlisted companies if the value of the investment exceeds EUR500 million; and the investor acquires a stake equal or higher than 10% of the share capital of the relevant Spanish company, or acquires control (“control” is defined in Article 7.2 of the Spanish Antitrust Law) over such Spanish company.

According to the applicable law, it shall be mandatory to obtain prior administrative authorisation from the Spanish government if:

  • the foreign direct investment is made in certain strategic sectors affecting public order, public security and public health (eg, critical infrastructures of energy, transport, health, communications, defence, etc); or
  • the foreign investor, regardless of whether the investment is to be carried out in a “non-strategic sector”, has certain characteristics (eg, if a third country government, including public agencies or the armed forces, controls, directly or indirectly, the foreign investor, this could affect, for example, sovereign funds).

If an investment subject to authorisation (taking into account the above) is carried out without obtaining such prior authorisation, the transaction will be null and void and significant fines may be imposed.

Spanish regulations related to the regime of foreign direct investments in Spain have raised many interpretative doubts, mainly as regards the determination, in practice, of the strategic sectors and investors affected by such regulations. In this regard, in the context of the execution of M&A transactions with foreign investors, there are many occasions on which doubts arise as to whether or not it is necessary to obtain prior authorisation. That is why, when in doubt, the parties to a transaction often adopt a conservative position and request authorisation in order to avoid uncertainties as to the validity of the relevant transaction. Taking into account that obtaining such authorisation can take up to six months (up to 30 days where the investment is between EUR1 million and EUR5 million and therefore the parties thereto can opt for a simplified procedure), this circumstance is delaying many M&A processes.

On 27 December 2022, the Spanish government approved a new Royal Law-Decree 20/2022 whereby (i) the scope of the term “direct foreign investment” was broadened so as to include not only the acquisition of control over a Spanish entity through the direct acquisition of at least 10% stake in its share capital, but also the acquisition of control over a Spanish entity as a result of an asset deal (that is, the acquisition of part of a company – assets – instead of a stake in its share capital), and (ii) the applicability of this legal regime with regards to foreign investments made by residents of countries inside the EU and EFTA is extended until 31 December 2024.

Developments in the field of insolvency law and acquisition of distressed companies

The recent amendment of the insolvency law (Ley Concursal) approved by Law 16/2022, of 5 September, has led to the inclusion in the Spanish legal system (through the transposition of the European Restructuring and Insolvency Directive 2019/1023) of new and relevant concepts such as (i) the likelihood of insolvency, (ii) restructuring plans, or (iii) the so-called insolvency prepack. The purpose of the reform is to allow viable companies to restructure and continue operating in the legal market, as well as to expedite the liquidation of those companies that are not viable. In this case, the possibility of selling, through the sale of productive units, parts of non-viable companies that preserve value, minimising the deterioration in their value caused by situations close to insolvency, stands out.

The above mechanisms, together with the end of the insolvency moratorium (30 June 2022), will have an impact on the M&A market: in the coming months it will experience an increase in transactions regarding the acquisition of assets or productive units within distressed companies not affected by insolvency situations, thanks to the flexibility that the entry into force of the aforementioned amendment has brought about in the current insolvency law.

New draft regulations to facilitate the listing of Special Purpose Acquisition Companies (SPACs)

The global macroeconomic context of rising interest rates and inflation has also put a slowdown on the incorporation of new SPAC companies both in Spain and in the rest of Europe, following the US trend.

A SPAC (“Special Purpose Acquisition Company”) could be defined as an investment vehicle that is traded in a public stock exchange for the sole purpose of acquiring or merging companies, thus creating new values in the stock for its investors.

Although these investment vehicles had their heyday in the US during 2020 and 2021, where they experienced an investment boom and even accounted for 40% of IPOs in 2020, expectations of a boom in SPAC activity in Europe have not been finally met: the low level of IPOs, lower activity in the European capital markets and a lack of regulation of these vehicles in some European countries have led to a more reduced investors’ appetite for this kind of investment vehicle.

In Spain, the flourishing of SPACs and their applicability in day-to-day capital markets activity requires, in view of the characteristics of investment and divestment in these vehicles, an amendment of the current corporate and securities market regulations. In this context, the Spanish government published, on 12 September 2022, a new draft bill of the Securities Market Law (Proyecto de Ley del Mercado de Valores y de los Servicios de Inversión), which aims to facilitate the listing of SPACs on the Spanish stock exchange and to amend the current legal regime so as to include more flexible and friendly requirements for this kind of investment vehicle.

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Trends and Development


Deloitte Legal SLP has a specialised service in corporate and M&A composed of more than 70 professionals led by eight partners. The firm’s lawyers have solid experience in advisory processes in M&A procedures, covering all the milestones of a transaction. Deloitte Legal’s multidisciplinary approach, industry specialisation and global network, present in more than 150 countries, provides the complete range of M&A transaction services, including expansion processes, alliances and divestitures which present a wide range of legal, tax, regulatory and other issues that may lead to the success or failure of the investment. Clients benefit from Deloitte Legal’s extensive experience of corporate and M&A, understanding of the PE/VC markets and industries and close collaboration with colleagues in other disciplines within the Deloitte global organisation.

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