Spain – Consolidation and optimism

M&A activity in Spain in 2025

Spain’s M&A market is emerging from a rebalancing cycle after two years of inflationary pressure, higher interest rates, and intermittent geopolitical uncertainty. Although companies have been slower to adjust their portfolios and deal processes are taking longer than usual, the market is still proving resilient and is recovering gradually. Pricing discipline has increased, international investor appetite is returning, and activity is shifting toward sectors with structural demand. From a legal perspective, this rebalancing has translated into longer execution timelines, heightened conditionality and increased focus on regulatory risk allocation in transaction documentation.

Market recovery is underpinned by three main factors. First, bank financing has stabilised, so companies now have access to credit on reasonable terms to carry out strategic deals. Second, business confidence has improved – according to the European Commission’s Economic Sentiment Indicator (ESI), it is at its highest since 2022. Third, Spain has become a leading destination for international investors: according to ICEX-Invest in Spain and international trade reports, it offers clear advantages over other destinations, such as regulatory stability, strong logistical infrastructure and a well-developed network of expert advisors for complex deals.

At the same time, legal certainty has become a decisive factor in deal execution. Buyers are placing greater emphasis on regulatory due diligence, change-in-law protections and conditions precedent linked to antitrust, foreign investment control and sector-specific authorisations, particularly in regulated industries.

The market continues to navigate geopolitical tensions, regulatory shifts, tariff-policy changes, and macro uncertainties. 

While the number of M&A deals has declined slightly year-on-year, total deal value has increased, reflecting a shift towards larger and more complex transactions, often subject to enhanced regulatory scrutiny and more sophisticated legal structuring. 

Sectors

The consumer sector consolidated its position as the most active market segment, showing relative resilience despite inflationary pressure on margins and consumer demand. 

Technology accounted for about 25% of all deals in 2025, with B2B software, artificial intelligence, and cybersecurity attracting the most interest from sophisticated investors.

Energy and infrastructure represent around 20% of M&A activity, led by renewable energy, power transmission, and storage projects. Europe’s green transition ensures that investment in these assets will remain strong over the coming decade, making this one of the most reliable areas for institutional diversification. However, deal activity has been partially constrained by structural challenges, particularly grid congestion and the excess of photovoltaic capacity in certain regions. From a legal perspective, this has increased uncertainty around permitting, grid-access rights and connection capacity as well as of potential curtailments, prompting investors to defer transactions pending regulatory developments on energy storage, hybridisation and grid reinforcement. 

Deal structuring and financing

From a structuring perspective, 2025 saw a clear increase in transactions combining equity investments with structured debt instruments and preferred equity features, including preferred dividends and cash-sweep mechanisms aimed at accelerated debt repayment. 

Major deals

Spain’s 2025 deal landscape has been characterised less by isolated mega-deals above €5 billion and more by a series of large, strategically significant transactions spread across sectors, consistent with a diversified, mid-to-large-cap market profile, many of which required complex regulatory, antitrust and financing analysis.

Top deals by value:

• Orange – €4.25 billion (acquisition of the remaining 50% stake in MasOrange)
• Naturgy Energy Group – €2.3 billion (self-tender offer to repurchase 9% of its own shares, approved by CNMV)
• Inocsa, S.A. – €2.2 billion (acquisition of a c.38% stake in insurer Grupo Catalana Occidente, reinforcing consolidation in financial services)
• Multiply Group (UAE) – €1.6 billion (purchase of 68% of Castellano Investments, owner of Tendam Retail, marking the largest cross-border deal of the year)

Other major deals:

• MasOrange & Vodafone + GIC (Singapore) – creation of a fiber joint venture valued at approx. €7 billion; GIC acquired 25% for about €1.75 billion
• Cox Energy – acquisition of Iberdrola México for $4.2 billion (~€3.9 billion), one of the largest outbound deals by a Spanish group
• Technology Sector Highlights – Lutech acquired the cloud and cybersecurity unit of Making Science (~€23 million) and Koesio bought Solitium, strengthening IT services consolidation.

Deal activity also shows the impact of market volatility and tough negotiations on valuations. For example, the sale of Urbaser to EQT and Blackstone has faced long delays, and Brookfield considered buying Grifols but has yet to make a formal offer. These large transactions – worth approximately €5 billion and €7 billion – depend on stable market conditions to finalise debt costs and valuations.

BBVA / Sabadell 

One of the year's most legally significant transactions was BBVA’s hostile takeover bid for Banco Sabadell, which raised complex issues relating to banking regulation, competition law, shareholder protection and the role of regulatory authorities. From a legal standpoint, the transaction illustrates the growing importance of regulatory engagement, remedies negotiation and procedural discipline in large-scale public M&A, particularly in highly regulated sectors such as financial services.

Data centres

Data centres have also emerged as a strategic asset class, driven by digitalisation and AI-related demand. However, M&A activity in this space faces increasing legal challenges, particularly regarding access to power, environmental permits and grid capacity. 

Outlook for 2026

Against this regulatory backdrop, Spain’s M&A market heads into 2026 in a consolidation phase following the recovery seen in 2025. The outlook is positive, supported by strong underlying demand and niche opportunities in areas such as premium housing and professional services. Technology and energy will lead the way, driven by digital transformation and the shift toward sustainable models. In this environment, companies will need to be increasingly selective, prioritising transactions that deliver long-term value while effectively managing regulatory, financing and execution risk.

Deal activity is expected to grow, but with greater emphasis on efficiency and resilience. 

In 2026, sector focus is expected to lie in:

• Technology (AI, cybersecurity, cloud)
• Energy (renewables, energy transition)
• Real Estate (logistics, premium residential)
• Financial Services (fintech, banking consolidation)
• Others (industry, healthcare, mobility)

Private equity’s record liquidity and better financing conditions will keep competition high for quality assets. Risks remain – such as valuation gaps, regulatory changes, and geopolitical volatility – but Spain’s fundamentals are strong: stable regulations, a robust advisory network, and many family-owned businesses open to partnerships. Cross-border activity should stay strong, with investors from the US, UK, and Europe active, and Spanish companies continuing selective investments abroad.

2026 will likely be a year of disciplined growth, sector concentration, and technology-driven execution, where legal structuring, regulatory foresight and execution certainty will be central to successful transactions. Spain offers a solid legal and regulatory environment for investors able to navigate complexity with precision and long-term vision.