emea M&A

Iberia M&A trends report for the first half of 2021

Brought to you by the M&A Community in association with Mergermarket. 

Rapidly expanding opportunities in energy, especially renewables, plus mining and utilities are driving deals in the region, with growing optimism for the future.

Iberia suffered considerably during the Covid-19 pandemic but prospects are looking up. The Spanish economy, one of the hardest hit in Europe last year, is predicted to grow 6.2% in 2021. Portugal is recovering at a slower rate, with a projection of 3.7% growth in 2021 and 4.9% in 2022.

Reassured dealmakers announced 320 deals in H1 2021 (31% more than in H1 2020), worth €31.3bn in aggregate – up 54.6% in value terms compared to H1 2020. 

Spain is attracting an even bigger share of the deals in the region  – up to 93.4% in H1 of this year. A total of 287 deals, valued at €29.2bn, was more than double the number YOY and reached the highest half-yearly deal value in three years.

The largest deal was Australian investment management company IFM Investors’ €5.1bn acquisition of a 22.7% stake in Madrid-listed Naturgy Energy Group, which is investing in renewable resources to add to its leading position as a gas and electricity distributor.

Interest from international buyers led to €23.9bn-worth of deals being announced, already the equivalent of 77% of 2020’s annual total, and a 35% increase in the number of deals being done.  Five of the nine largest deals were conducted by bidders based outside Europe with US PE firms particularly active.

Domestic activity was also strong – 72 deals announced worth €7.4bn, up 52.7% on the same period last year. The largest of these was Spanish telecoms group MásMóvil Ibercom’s  €3.5bn takeover offer for rival Euskaltel – a merger of Spain’s fourth and fifth largest telecoms companies.

The largest deal was Australian investment management company IFM Investors’ €5.1bn acquisition of a 22.7% stake in Madrid-listed Naturgy Energy Group, which is investing in renewable resources to add to its leading position as a gas and electricity distributor.

Interest from international buyers led to €23.9bn-worth of deals being announced, already the equivalent of 77% of 2020’s annual total, and a 35% increase in the number of deals being done.  Five of the nine largest deals were conducted by bidders based outside Europe with US PE firms particularly active.

Domestic activity was also strong – 72 deals announced worth €7.4bn, up 52.7% on the same period last year. The largest of these was Spanish telecoms group MásMóvil Ibercom’s  €3.5bn takeover offer for rival Euskaltel – a merger of Spain’s fourth and fifth largest telecoms companies.

The highest value deals were in energy, mining and utilities. Worth €8.1bn – more than double the total for H1 2020 – the sector now represents 25.8% of the market, up from 19.4% last year. 

As well as the Naturgy deal, the Swedish PE firm EQT Partner made a €1.2bn takeover bid for Solarpack Corporación Tecnológica, a Spanish renewable energy developer with solar plants in eight countries, including Spain, Chile and India. And Canadian power company Northland acquired venture capital fund Helia Renovables’ 540MW wind and solar portfolio for €1bn. The renewables sector will continue to be a major attraction – Spain wants to reach 120GW of installed renewable energy capacity by 2030, primarily in wind and solar.

Industrials and chemicals saw 50 deals worth just under €7bn, the largest being Platinum Equity’s €3.5bn bid for Urbaser. Another significant deal was the Carlyle Group’s €1.4bn sale of Portuguese container producer Logoplaste to the Ontario Teachers’ Pension Plan Board, highlighting the growth potential of sustainable packaging solutions.

The peninsula’s buyout volume increased slightly, but the €12.1bn-worth of deals through H1 was the equivalent of 90% of 2020’s annual total, led by international interest in energy and renewables assets.

Outlook 

As Spain’s Covid-19 infection rate decreases and the vaccination program expands there is renewed optimism in the peninsula’s economies. Dealmakers are correspondingly encouraged, with a definite boom in investment in the high growth renewables sector, albeit with a note of caution about future waves of infection.

Download the full report here

Notes:

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