This article includes a summary of the market, trends and legal aspects of M&A activity in Spain throughout 2025, along with an overview for 2026. It intends to provide readers with a clear understanding of the impact of the prevailing macroeconomic conditions on the M&A landscape, while also highlighting key trends in this practice.

Performance of the M&A Market in Spain During 2025

Although 2025 ended on a positive note, with several large transactions being completed, M&A activity in Spain started the year more slowly than expected. Deal making was initially constrained by a challenging macroeconomic environment, ongoing geopolitical uncertainty, inflationary pressures and a cautious financing backdrop, all of which contributed to longer execution timelines and increased selectivity among investors.

According to TTR Data’s 2025 annual M&A report, a total of 3,336 transactions were completed, representing an 8.02% decrease compared to 2024. Despite the lower deal volume, aggregate transaction value rose significantly to approximately EUR103 billion, an increase of 19.40% compared to 2024. This contrast reflects a market increasingly driven by a smaller number of large, strategically significant transactions rather than broad-based activity.

As in previous years, the Spanish M&A market remained largely dominated by small and mid-sized deals. Nevertheless, several landmark transactions stood out for their size and strategic importance, including Liberty Media’s acquisition of Dorna for EUR4.2 billion, Orange’s acquisition of a majority stake in Masorange for EUR4.25 billion, and the acquisition of Universidad Alfonso X El Sabio by Cinven and a group of private investors for approximately EUR2 billion.

From a sectoral perspective, activity was primarily concentrated in infrastructure, financial services and telecommunications – sectors that continued to attract strong interest due to consolidation opportunities and the potential to generate operational synergies. In parallel, certain non-core areas – particularly education and sports – also recorded notable one-off transactions, driven by the attractiveness of specific assets rather than sustained market momentum. In the specific case of the pharmaceutical sector, 2025 marked a significant reactivation of M&A activity. Although transactions carried out within the sector have shown a more selective trend (it is estimated that 26 transactions related to the pharmaceutical sector were closed in Spain in 2025), they have had a greater economic impact compared to previous years.

Overall, 2025 reflected a selective but resilient Spanish M&A market, characterised by lower volumes, higher deal values, and a clear focus on strategic assets and long-term value creation.

M&A Landscape in Spain for 2026

The outlook for Spanish M&A activity in 2026 is broadly positive, with a rebound expected in deal opportunities. Nevertheless, 2026 will be significantly shaped by external factors that will be decisive in the evolution of transactions throughout the year. 

Although some international institutions such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the European Central Bank (ECB) forecast euro-area GDP growth slightly below 2025 levels, the ECB’s deposit rate has stabilised at around 2%. This contributes to greater certainty regarding financing costs and supports a medium-to-long-term scenario of stability. Such a favourable environment is expected to play a key role in the reactivation of strategic M&A transactions, enabling investors to plan their projects with increased financial visibility and confidence.

Throughout 2025, a significant portion of M&A activity focused on the energy, infrastructure and telecommunications sectors. This trend is expected to continue into 2026, with further consolidation anticipated in these industries, which remain highly attractive to international investors.

At the same time, 2026 is expected to see a notable resurgence in M&A transactions in distressed and special situations contexts. Recent practice shows that accelerated sale processes and restructuring transactions are increasingly driven by private credit, which has become one of the main catalysts in this segment. Divestments undertaken by companies to preserve liquidity are therefore attracting growing interest from distressed and special situations funds.

Despite this broadly optimistic outlook, Spain faces significant challenges and external factors that will continue to influence the economy and have a direct impact on M&A activity. Geopolitical tensions, technological developments, trade restrictions and protectionist policies are likely to persist, increasing volatility and complexity in strategic decision-making. In addition, the regulatory landscape – both at national and European level – remains in constant evolution. Moreover, it will be particularly significant to observe how Spain addresses the uncertainty arising from the tariffs imposed by the United States government – despite the existing doubts as to their validity. In this context, market participants are already adopting mitigation strategies aimed at reducing exposure to such tariffs, including (among others) the acquisition of US-based companies.

Within this context, M&A transactions are expected to increasingly focus on situations where the ability to anticipate risks and adapt to a changing environment will be critical to the successful execution of deals.

M&A Market Trends in Spain in 2026

Financial investors’ leading role

Financial investors are expected to continue playing a central role in the Spanish M&A market in 2026, particularly as regards private equity funds and other financial sponsors. After a period of macroeconomic uncertainty and higher interest rates, funds are deploying capital selectively, focusing on resilient sectors such as technology and healthcare. While overall deal volumes may remain moderate, transaction values are likely to be supported by sponsor-led mid-market and large-cap deals.

Private equity firms are also under pressure to rotate portfolios, which are driving secondary buyouts, carve-outs and structured exits. In addition, alternative financial investors, including infrastructure funds and private credit providers, are becoming more relevant as flexible financing solutions gain importance.

Overall, financial investors are shaping not only the level of activity but also the structure and sophistication of transactions in Spain, reinforcing their position as key drivers of the M&A landscape in 2026.

AI as a competitive necessity

In Spain, during 2025, AI moved from being “nice to have” to becoming a core enabler of M&A execution, as it has significantly accelerated target screening, enabled the automated review of large document sets, and supported anomaly detection and risk identification in due diligence processes. This impact has been particularly visible in data-intensive sectors such as fintech, insurtech, retail, HR-tech, or adtech. At the same time, the regulatory and compliance landscape has expanded materially, since the EU AI Act began to apply rules on prohibited practices and AI literacy obligations in February 2025, while governance requirements for general-purpose AI providers became applicable later in the year. In parallel, privacy enforcement in Spain has intensified, with supervisory authorities placing greater scrutiny on advanced technologies, including biometric systems and AI-driven use cases.

Looking ahead to 2026, market practice is expected to evolve towards treating AI governance as a transaction-critical element rather than a post-closing remediation exercise. As the EU AI Act becomes fully applicable in August 2026, buyers are increasingly demanding clear evidence of robust governance frameworks, including defined roles and responsibilities, comprehensive documentation, effective human oversight mechanisms, and strong controls over data provenance and training datasets. Consequently, these elements are no longer viewed as purely regulatory matters but are increasingly reflected in valuation adjustments, escrow mechanisms and tailored contractual protections. In Spain, the gradual reinforcement of supervisory capacity is likely to consolidate this shift, moving the focus away from high-level policy declarations and towards demonstrable, auditable compliance in practice.

At the same time, a new set of deal drivers and potential deal breakers is emerging at the intersection of AI, cybersecurity and operational resilience. Since the Digital Operational Resilience Act (DORA) has been applicable from January 2025, ICT risk management, third-party and cloud provider oversight, incident-reporting readiness, and resilience testing have become central considerations in financial-sector transactions and in adjacent industries. These factors directly influence both the depth of due diligence and the cost and complexity of post-acquisition integration. Furthermore, Spain’s ongoing process of transposing NIS2 continues to keep cybersecurity governance high on board agendas, while also introducing uncertainty in transactions where the target’s criticality or regulatory scope is not yet fully clear. Overall, although AI will continue to accelerate M&A processes, the competitive advantage in 2026 will clearly favour those advisers and investors who approach AI, data protection and cybersecurity controls as genuine value-creation levers rather than as a mere compliance checklist.

Consolidation of distress M&A

Following an initial period of practical implementation and judicial interpretation, restructuring plans have reached a stage of full maturity and have progressively consolidated their position as a core pillar of the Spanish pre-insolvency framework.

Restructuring plans now provide a flexible legal framework for the implementation of operational, corporate and transactional measures that were traditionally addressed through the M&A market. These measures include (among others) reductions and simultaneous share capital increases, sales of business units, “gifting” schemes, debt-to-equity conversions, issuances of hybrid instruments and intra-group reorganisations, all of which may be implemented within the perimeter of a restructuring plan.

Over 2025, the financial dimensions of these plans became particularly significant. Commercial courts are placing greater emphasis on the company’s viability, which in turn requires a robust and detailed assessment of financial projections, capital structure and enterprise valuation.

This evolution points to a progressive convergence between pre-insolvency law and M&A mechanisms in the context of distressed transactions, consolidating restructuring plans as a comprehensive and flexible framework for the legal and financial management of corporate distress.

Increasing use of W&I insurance

An increasing and consolidated trend in the Spanish M&A market has been the incorporation of specialised insurance products as a tool to manage risk and facilitate deal execution, reflecting a broader trend seen across European markets where deal complexity and regulatory scrutiny is progressively increasing.

In Spain, this has manifested in a more frequent use of warranty and indemnity (W&I) insurance to protect buyers and sellers against unforeseen liabilities, facilitate negotiations and reduce the need for large price adjustments or long earn-outs. This shift mirrors an observable global pattern in which insurers are becoming active participants in M&A ecosystems by underwriting representations and warranties, tax risks and litigation exposures, which helps to mitigate buyer concern over hidden liabilities and enables sellers to cleanly exit with greater certainty. As M&A activity in Spain expands into more strategic and cross-border deals, insurance solutions are playing a critical role in reducing transactional risk and enhancing deal certainty, making them an increasingly used instrument of the corporate acquisition playbook.

The expanding role of the Comisión Nacional de los Mercados y la Competencia (CNMC)

During 2025, the CNMC was highly active in supervising M&A activity in Spain, highlighting its key role in controlling market concentration. Major transactions included Indra’s EUR725 million acquisition of 89.68% of Hispasat from Redeia, as well as its review of BBVA’s proposed takeover of Banco Sabadell. The Spanish competition authorities also cleared transactions involving Endesa, MasOrange, Mahou San Miguel and Vodafone España, among others.

Significantly, for the first time since its creation, the CNMC prohibited a concentration, blocking the acquisition of Institut de Radiofarmacia Aplicada de Barcelona by Cucrium Pharma Holding Spain due to serious competition concerns in cancer diagnostic testing markets in north-eastern Spain.

The CNMC is expected to remain a decisive actor in 2026, particularly in strategic and highly regulated sectors.

M&A Trends in Key Sectors in 2026

Banking

During 2025, the banking sector showed strong financial performance but a mixed M&A landscape. M&A activity exhibited higher deal value but lower volume, with the market mobilising more capital even as the total number of transactions fell, reflecting selective, larger deals and continued investor interest in financial services. Major banks such as Santander and BBVA delivered record profits in 2025, with Santander posting its highest-ever annual profit and advancing strategic deals such as the Webster Financial acquisition to expand in the US market. Meanwhile, BBVA’s attempt to acquire Banco Sabadell was rejected, and BBVA has publicly stated that it will pursue organic growth rather than further acquisitions.

For 2026, expectations are positive. With anticipated stability in interest rates and ongoing digital transformation, M&A is expected to remain a strategic lever for growth, particularly for institutions seeking scale or technological capabilities. Advisory rankings suggest more middle-market activity and cross-border interest.

A new influencing factor is regulatory pressure and compliance costs tied to EU and domestic reforms. Stricter oversight, new capital buffer proposals and banking-specific taxes could increase operational burdens, potentially slowing consolidation among smaller banks and shaping future deal rationales.

Defence

In 2026, the M&A landscape in Spain’s defence sector is undergoing a profound transformation, reflecting a structural shift in national industrial policy and geopolitical priorities. Following increased European security commitments and Spain’s pledge to raise defence spending towards NATO targets, the domestic market has become significantly more dynamic. Consolidation, vertical integration and strategic alliances are reshaping the competitive environment, with the objective of creating scaled national champions capable of competing at the European level.

At the centre of this consolidation wave is Indra, which has repositioned itself as the cornerstone of Spain’s defence industrial base. The company has accelerated its strategic pivot towards defence systems, land platforms and advanced technologies. One of the most closely watched developments has been the potential merger with Escribano Mechanical & Engineering, a move that would reinforce Indra’s manufacturing depth and strengthen its control over key segments of the value chain. While discussions have generated governance and market scrutiny, they illustrate the broader drive towards industrial scale and vertical integration.

Another defining feature of the 2026 landscape is capital mobilisation. Institutional financing and private equity interest have intensified, supported by European funding instruments and a more favourable perception of defence assets among global investors. In parallel, new sector-focused investment vehicles are being raised to channel capital into aerospace, cybersecurity and dual-use technologies, further stimulating M&A activity among mid-sized firms and specialised suppliers. In this context, new sector-focused investment vehicles are being raised.

Overall, Spain’s defence M&A environment in 2026 is characterised by consolidation, financial sophistication and policy alignment. The combination of increased public expenditure, strategic corporate leadership and active capital markets is accelerating the creation of a more integrated and competitive defence ecosystem, positioning Spain as an increasingly relevant player within Europe’s evolving security architecture.

Energy

In 2025, Spain became one of the leading countries in the EU in terms of renewable energy generation. However, the year was marked by significant regulatory debate, and the second half of 2025 also evidenced a clear slowdown in traditional renewable technologies – particularly solar and wind – after several years of sustained growth. 

At the same time, the saturation of electricity grids has emerged as one of the main challenges to be addressed. Consequently, 2026 will be a key year for establishing an operational and economic framework capable of resolving congestion issues and, therefore, access constraints to both distribution and transmission networks resulting from limited physical capacity. This situation has led to the blockage of new projects due to the lack of available connection points, thereby preventing the development of generation and/or storage projects, as well as residential, industrial or data centre initiatives, ultimately causing a slowdown in investment.

From an investment perspective, 2025 witnessed an increase in financing costs, which has triggered visible tensions among certain highly leveraged developers or those with oversized project portfolios, leading in some cases to portfolio reorganisations, selective divestments and restructuring processes within renewable platforms. One illustrative example of this trend can be found in the negotiations reportedly undertaken by Cinven in relation to the restructuring of its energy portfolio in Spain.

In conclusion, the Spanish energy sector is expected to undergo a period of consolidation in 2026, primarily driven by financial optimisation and balance sheet strengthening within traditional renewable assets, although some limited dynamism may emerge in newer technologies such as biomethane or battery energy storage – both standalone and hybridised with renewable assets. In this context, it will be particularly important to strike a balance between three key aspects – regulatory stability, economic viability and legal certainty – as the market will demand projects that are technically feasible, financially robust and legally sound. 

Government and public services

During 2025, transactions in the public sector were primarily focused on adjusting the nature of public entities. On the one hand, this has involved enabling certain entities to operate in the private market with greater flexibility, and, on the other hand, renouncing such flexibility in exchange for assuming public powers, thus becoming entities with more public-law character and a reduced private-law component.

Looking ahead, the transactions expected in this area are likely to be limited in number and will primarily respond to existing needs to adapt the nature of public entities to citizens’ needs, rather than to a policy aimed at reducing the overall number of public bodies.

Tourism and hospitality

The Spanish tourism and hospitality sector showed strong resilience and growth throughout 2025, with investment activity remaining at elevated levels and operational performance supported by high occupancy rates and solid pricing, as highlighted in Colliers’ reports.

Looking ahead for 2026, the outlook remains positive, with the sector expected to sustain historic highs in occupancy and average daily rates, driven by robust demand and a persistent shortage of quality assets. These dynamics are fostering further market consolidation, as larger players are increasingly positioned to acquire smaller operators amidst strong investor appetite.

M&A activity is also being shaped by structural challenges such as labour absenteeism, talent scarcity and retention, sustainability requirements, and the growing role of AI in operational efficiency. In this context, large-scale transactions – such as Blackstone’s potential divestment of its European hotel portfolio – could act as catalysts for deal flow, reinforcing an active M&A environment focused on scale, efficiency and long-term value creation.

Life sciences and healthcare

During 2025, the healthcare and life sciences sector continued to be one of the main drivers of M&A activity in Spain, albeit with a slight slowdown due to the uncertain international macroeconomic environment. The medtech segment was the main beneficiary, with CDMOs, diagnostics and the consolidation of specialised niches also standing out. Notably, there has been strong interest from international financial players in this sector in Spain. One of the most prominent transactions in the sector was the acquisition of Donte Group (Vitaldent, Smysecret, among other brands) by the Canadian pension fund Ontario Teachers’ Pension Plan (OTPP).

In 2026, the market is expected to continue growing, driven by the increasing challenges being faced: the progressive aging of the population, greater awareness of physical and mental well-being, and rising life expectancy. In addition, there is increasing pressure on the public healthcare system, which requires more agile and efficient solutions to remain sustainable.

One area where the authors expect to see increasing activity is the CRO (contract research organisation) segment, which will continue to benefit from structural tailwinds driven by sustained growth in clinical trial activity (with approaching patent cliffs enabling recurring revenues and clients), increasing protocol complexity, and ongoing outsourcing by pharma, biotech and medtech sponsors. The CRO sector has consistently outperformed broader healthcare services in terms of growth, visibility and cash flow stability, underpinning continued investor appetite.

As in other economic sectors, AI is one of the factors that could revolutionise the healthcare sector and contribute to much-needed sustainability. Medtech companies have been at the forefront of improving the patient care experience through the use of data, analytics and insights combined with AI technologies to offer personalised treatment options. They have also helped drive research, drug development and quality control. However, this also entails new and significant risks, such as cyber-risks related to data integrity and confidentiality.

Finally, the authors would highlight the opportunity to reach agreements among different stakeholders. A large share of growth in companies within the sector comes from products and services derived from agreements between different companies. These agreements represent a more flexible way to drive growth than M&A, and are therefore a highly attractive alternative.

Real estate

The market saw a reactivation in 2025 that is expected to be maintained in 2026 (considering, for example, the investment cycle of certain funds). Legislative changes, the evolution of interest rates and other macroeconomic variables (especially those of a financial nature) may influence the consolidation of this growth. In 2026, growth is expected in the residential, student housing, senior living and data centre sectors.