Difficult “Spanish” for major companies in the country

Difficult “Spanish” for major companies in the country

MadridIt was 2014, and the then government of Mariano Rajoy opened the door for SEPI to enter as a shareholder in Spanish olive oil manufacturer Deoleo –The most important in the world and owner of brands such as Carbonell—. The aim was to preserve its “Spanishness” at a time when shareholders such as Bankia and La Caixa were considering exiting it. Now, that movement raised by Rajoy's CEO that ultimately did not materialize has been put forward again: “This brand [Deoleo] He must remain in Spain. Things can be done to prevent the company from being sold to a foreign investor. This has been done with Telefónica“, noted Antonio Luque, president of the oil cooperative Dcoop, when the government of Pedro Sánchez had just announced that it was “exploring” the entry teleco Spanish Luque's words must have been formulated at a time when Diulio's main shareholder, the British fund CVC (57% of capital), activated the mechanism to divest itself of its stake.

Dcoop's alert comes after other companies, com Celsa and Telefonica have opened themselves up and suffered the debate over the difficult “Spanishness”. Of the companies listed in the country. The situation is particularly acute in listed companies that have a more fragmented shareholding or lower value on the stock market, which usually attract foreign “speculative or opportunistic funds,” explains the head of the Catalonia Economists' Financial Investment Advisers Group at the college. Begonia Castro. When the arrival of foreign investment affects a strategic company – such as energy transformation, security and defence, technology or digitalisation, among other areas – the alarm sounds even louder.

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50% of Spanish stocks are in international hands

The reality is that major Spanish listed companies are increasingly in the crosshairs of foreign capital. So-called institutional investors, such as investment fund managers, stand out here (BlackRock, for example, has a presence in 21 of the companies that make up Íbex-35). Also venture capital funds or Sovereign funds, linked to a country. The year 2022 ended with a new record of capital of listed Spanish companies in the hands of global investors: they already control 50.3% of the shares, according to the latest report for international investors issued by the Center for the Study of Spanish Stock Exchanges and Markets (BME). ).

while The presence of these investors has grown At an accelerating rate over the past 30 years, the weight of Spanish non-financial companies in the shareholding of listed companies has remained unchanged (21.3%). On the other hand, the weight of individual investors or families decreased (16.2%), which falls mainly on titles such as Ortega, Entrecanales and Botín. The role of public administrations has also begun to disappear (from 16.6% of the capital of listed companies in 1992 to 3.2% in 2022) and the role of banks and savings banks (3.1%), as shown in the attached chart.

Share ownership in Spanish listed companies

Percentage data of the total market capitalization at the end of the year for all listed companies

This trend goes hand in hand with the internationalization of listed companies and the consequent diversification of investors. Privatization wave in the late 1990s It reduced the country's footprint in favor of that of families, but only for a few years. With the financial crisis of 2008, the performance of the Spanish stock market faltered, especially in sectors such as banking, which concentrated many family investments.

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The importance of control

A financial source asks: “When the government talks about the presence of large Spanish industrial funds in strategic companies, who do you mean?” “There is nothing in Spain,” he answers. The same source adds: “You have names like Florentino Pérez (ACS), Juan Roig (Mercadona), and Amancio Ortega (Inditex) who are investing in you, but on another level.” “Alternatives [a Espanya] “Foreign investment funds are limited,” confirms Manuel Pinto, XTB analyst in a conversation with ARA.

One of the main issues, Castro recalls, was the “strategy” behind these international investors. The economist adds: “You can sell shares to a foreign fund, but that does not mean that it has power over decisions that affect the company.” The key here is board members and the voting rights they may have. “Being a venture capitalist who is just looking for return is not the same as asking for a chair [al consell]”He ponders.

An example is Telefónica. If STC finally requests to acquire up to 9.9%, will become the second largest shareholder after the state, and therefore the second largest shareholder on the board of directors (if you ask to be there). However, the rest of the heavyweight shareholders on the board would tip the scales towards the country's existing hard core: Criteria, CaixaBank and BBVA. For this reason, the company environment emphasizes that despite the operation of STC, the Spanish character of Telefónica “has not been lost”.

Pinto also points to another factor: “The fear, above all, is of funds seeking to consolidate their investments quickly without taking into account other shareholders.” The Export and Investment Authority ICEX, a body dependent on the Ministry of Economy and Trade, explains to ARA that most investments in listed Spanish companies are not direct (when the investor obtains significant influence in the company), but are “usually focused on obtaining a financial return and I do not aspire in principle.” To participate in management.

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“We have to assume that the presence of foreign funds will grow,” Castro adds, recalling that one of the “incentives” for listed companies is to attract new investors. “Governments are now more committed to investing in strategic sectors, not only in Spain, but also in Germany or France,” Pinto says. This commitment, revived with the pandemic and the outbreak of war in Ukraine, has reopened the debate on the balance between globalization and the promotion of strategic autonomy, and has only just been reinforced with cases such as that of Celsa (which went from being a Catalan family company owned by a group of international funds) or Telefónica itself. .

The challenge now is to reconcile the interests of others (profitability) with the idea of ​​strategically rearming states.

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