2022, a promising year for M&A despite the uncertainty

The most significant operations have been in regulated sectors such as energy, infrastructure, pharmaceuticals or insurance.

2021 has been a record year, a good year for the mergers and acquisitions sector, in which we have witnessed the reappearance of a considerable number of large-value transactions in the Spanish market. And 2022 promises.

Interest rates at historical lows and abundant liquidity in the hands of investors are undoubtedly key elements to explain, at least in part, the dynamism of the mergers and acquisitions (M&A) sector during the past exercise. The venture capital sector, mature and consolidated in Spain, has also had a lot to do with it, although unlike other years, a large part of the main operations have involved industrial clients.

There are also other factors that explain the notable increase in the volume of transactions executed in 2021, such as, for example, the dynamism of the energy sector and, in particular, of renewable energies, as well as the recovery –or conversion– of the most affected businesses due to the COVID-19 pandemic.

In any case, the high level of activity and the complexity of the transactions have meant that all of us professionals have had to make a great effort to meet the needs of our clients -especially in the busiest months, such as June and July and the last months of the year–, being increasingly necessary to have a specialized and multidisciplinary team.

The difficulty of the transactions has meant that those in which only a small team has participated have been, in this last year, a rarity, and it is difficult to think of a corporate operation that has not posed a significant challenge from the point of view of the Regulatory, labor, tax, data protection, competition law, etc., or that lacks an international component. Or rather, that it has not combined practically all these elements.

In fact, most of the most significant operations this year have been in highly regulated sectors, such as energy, infrastructure, pharmaceuticals or insurance. Areas in which it is essential to have teams made up of specialists from each of the relevant areas of the transaction.

To this we add the restrictions on foreign investment decreed by the Government at the beginning of the pandemic, which have once again stood out as one of the great technical challenges in many of the operations carried out in 2021, with a significant impact on processing times. execution, prolonging by months, in some cases, the period between signing and closing, and in many other cases, notably complicating the prior analysis to determine with certainty the need, or not, to require prior authorization.

Considering all of the above, we are cautiously optimistic for 2022. Despite the voices that denounce a certain cooling in the sector, taking into account the level of work in these first days of the year and considering the transactions initiated in December, related to operations that will take their first steps during this first quarter, this new year should also be very good.

However, there are many factors that could alter these forecasts, such as the increase in inflation, the increase in interest rates and financing costs, the persistence of problems in global supply chains or the evolution, always uncertain, of the virus.

Although these are issues beyond our control, we are convinced that our task is to follow them carefully, being very close to our customers, trying to anticipate their needs and provide certainty, an increasingly scarce and valued asset. Only in this way is it possible to maintain their trust, the key to achieving the coveted position of leader in the M&A rankings.