The New Era of Corporate Opportunities and Challenges in Spain
The year 2023 is witnessing dynamic shifts in Spain’s economic landscape, most notably the enhanced ease of Initial Public Offerings (IPOs) and an increase in merger and acquisition (M&A) activities. Spain, taking the EU's rotating presidency in the second half of 2023, is introducing significant legislative changes, such as the Listing Act. This regulation aims to streamline the process of company listings by reducing timelines, simplifying procedures, and lowering fees.
With the Listing Act, the grueling IPO booklets are simplified, reducing by half but still maintaining 300 pages of requisite content. This promises substantial savings on consulting and professional services, bringing about remarkable bureaucratic relief for companies.
Another regulation that simplifies bureaucratic obligations for listed companies is the recent Securities Market Law. This law introduces the concept of Special Purpose Acquisition Companies (SPACs), allowing quick listings through the merger of a listed shell company with a traditional business. Firms like Wallbox have already successfully used this formula.
The National Securities Market Commission (CNMV) is also making significant strides towards easing the process of company listings in Spain. With an unwavering commitment to reduce bureaucratic burdens, the CNMV has proposed a decrease in the charges imposed on companies for listing. They consider that the accumulated surplus of 12 million euros would serve a better purpose in reducing the burden on companies, rather than adding it to the treasury.
The second half of 2023 also observes a sharp surge in the sector of mergers and acquisitions. According to the "M&A Outlook in Spain 2023" report by KPMG in collaboration with the CEOE, 54% of executives are expected to drive their company's growth through M&A operations in the coming months. This is a significant increase from the 11% of 2022.
In addition, Secondary Buyout (SBO) activities among private equity funds have soared over the past year in Spain. SBO is an M&A operation where one private equity fund buys another fund's stake in a previously acquired company. These mega-purchases moved more than 7,000 million euros last year in Spain, hinting at an expanding growth trajectory in the years to come.
However, despite these new opportunities, there are challenges. Among them are economic uncertainty, finding good investment opportunities, high asset prices, transaction complexity, and difficulty in obtaining financing. The latter remains a significant challenge, with raising funds becoming increasingly expensive due to low-interest rates.
In conclusion, the second half of 2023 brings an exciting blend of opportunities and challenges for businesses in Spain. The Listing Act, increased M&A activities, and the rise of SBOs offer dynamic avenues for growth, while businesses must also navigate the complexities of obtaining financing and dealing with economic uncertainties.
Stay ahead of the curve and learn more about these industry changes with JDA and their potential impact on your business. We invite you to dive deeper into these insights and explore the ways in which the evolving economic landscape can present opportunities for your enterprise.
This article is based on JDA’s work alongisde Confianz, a firm associated with SFAI Spain
