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Understanding Spain’s M&A Market

mergermarket interviewed private equity partners, senior M&A bankers, M&A lawyers and CEOs in Spain to get beyond the headlines and assess the real momentum and prospects for Spanish M&A in the next twelve months.

At present Spain’s M&A boom appears to have peaked. The strong domestic M&A market of the past few years has been matched by many large high-profile Spanish corporates undertaking cross-border transactions. 

The year 2007 in particular, saw M&A activity in Spain reach the highest level of the current boom in deal value terms. This is largely because of the resolution of the protracted Endesa situation – which saw the energy giant bought by Enel of Italy for €44.2bn. Spanish M&A volume, meanwhile, appears to have peaked in 2006, the slump in the Spanish Construction sector will clearly have an effect on M&A going forward.

Certainly, the indications from our proprietary research is that deal making is set to decline in 2008. Indeed, 63% of respondents expect the level of M&A deal making will decrease. Elsewhere, the outlook for cross-border M&A by Spanish companies is somewhat divided among respondents, with 36% expecting an increase, and 32% expecting a decline.

For the purpose of this report mergermarket interviewed 100 senior M&A practitioners in Spain, with the aim of getting beyond the headlines and assessing the real momentum and prospects for Spanish M&A in the next twelve months. mergermarket spoke to an even mix of prominent Spanish private equity partners, senior M&A bankers, M&A lawyers and CEOs of acquisitive Spanish corporates. The motivation was to garner their views on a range of issues spanning both strategic M&A and private equity activity.