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The Big Four accounted for three out of every four euros in M&A of Spanish companies in 2022.

The Big Four have been at the center of controversy in recent months over the working conditions of their workers, leading to labor inspections. These are four large multinational companies (PwC, Deloitte, KPMG and EY) that offer services to corporations such as consulting, legal or tax advice, or auditing their accounts. The latest data on the Spanish mergers and acquisitions market for the financial year 2022 confirms the strength of these companies in Spain. Almost three out of every four euros moved in this type of business movement had his advice.

Mergers and acquisitions, known in the corporate world as M&A (mergers and acquisitions), include all business acquisitions, integrations, equity investments or cash injections through venture capital. In total, 108,000 million euros were transferred in these transactions in Spain. Of this total, the “big four” recommended operations that mobilized almost 79,500 million euros, according to the annual report carried out by the consultancy specialized in these transactions, TTR Data, which quantifies the operations carried out both in Spain and abroad. Spanish companies.

In other words, 74% of the money in these contracts went through these four consulting firms, which are omnipotent in the market. The data also shows its particular dominance among the operations that transferred the largest sums of money. In total, 3,060 operations were closed in Spain between January and December last year. Only 378 went into the hands of the “big four”, that is, they collect most of the mobilized money, despite the fact that they participated in only 12% of the contracts.

In recent months, the volume of work of these four consultants has been analyzed in particular. First, during the negotiations of a new collective agreement for the sector, in which the employer initially offered schedule flexibility to be able to achieve 12-hour days. During processing, this proposal was rejected due to pressure from the trade unions. However, the model was back in the news this month when it was revealed that labor inspections carried out in November were a coordinated and “simultaneous” operation at four companies.

Advice on mergers and acquisitions is one of the many services these four companies provide to the nation’s largest corporations. In these types of operations, they provide advice on issues such as funding channels or the legal framework. In addition, they are also responsible for the well-known “due-dealing”, which is the pre-account investigation and economic information that a company does about a company it intends to acquire or merge with. Three out of four increased the volume of operations they handled last year. The leader was PwC, which participated in contracts worth almost 40,000 million euros, 19% more than a year ago, when it was already the most active. It was followed by EY, up almost 53%, ahead of Deloitte, the only one to fall back, with a 38% drop. KPMG remained in fourth place with a 15% increase.

Therefore, most of them are growing even though the mergers and acquisitions market is closed in 2022. The 108,000 million euros transferred last year is a far cry from the more than 120,000 million committed in 2020 and 2021, two historic ones. For years, despite being in the midst of an economic crisis due to the coronavirus pandemic. 2022 results represent a return to 2018 levels. The amount fell by 12%, although there was a slight increase in the number of operations. According to TTR Data statistics, the 3,060 closed deals were only 11 more than a year earlier.

The report indicates which were the largest operations in Spain during the past year. The biggest deal of 2022 was the acquisition of the American Immucor by the Catalan company Werfen. These operations, in the medical equipment market, were determined to be slightly more than 2,000 million euros. The arms industry was the protagonist of the second largest operation, when Maxam sold Expal Systems for €1,200 million. The purchase of Abu Dhabi from Noatum port group, more than 660 million, closed the podium of the biggest deals of the year.

However, none of these transactions took place in the most active M&A sectors in 2022. The real estate market was the most intense, with 647 transactions and an increase of 23%. Internet and technology signed 362 contracts, 2% less; And renewable energy registered 224 transactions, 19% less than the previous year.

As with consulting, TTR Data also ranks the most active law firms in this market as legal advisors. The big names in Spanish law appear on this list. It is headed by Uria Menendez, who advised on operations that turned over 37,148 million euros. Freshfields Bruckhaus Deringer, despite participating in only 13 deals, was in second place with 36.3 billion. Pérez-Llorca, Gómez Acebo and Jones Day are the top five law firms in corporate operations in 2022. Garrigues and Cuatrecasas, two of the biggest names in Spanish law, lead the number of preferred operations.

Venture capital skyrocketed

Although the market has slowed down significantly compared to the pace of previous years. The report points to a segment that has not stopped growing and has had a much more intense year compared to previous years. This is venture capital, known in business jargon as private capital, which moved almost 44,000 million euros, according to estimates by TTR Data, which records operations in or outside Spain where a Spanish company was involved. It represented an increase of 22% and 30%, if the number of operations is counted. The aforementioned sale of Expal, the acquisition of Garnica by the Carlyle Fund and the divestment of Ferrovial in Amey were the main operations in the venture capital sector.

Regarding operations in Spain alone, the venture capital association SpainCap recently estimated that 8,375 million euros of investment deals were closed in 2022, 15% more than a year earlier and a historical record for this market. Almost a thousand companies received this type of financing last year.

The branch usually accompanied by venture capital is known as venture capital, as investments in small or medium-sized companies, usually startups, are known. According to TTR Data, 5,400 million euros were transferred to Spain last year. This amount has decreased by 42% compared to last year. The largest operations in this segment were carried out by Factorial, Kantox or Vesttoo.

The report also shows an increase in foreign investor interest in operations in Spain or Spanish companies, particularly from the US. Of the slightly more than 3,000 operations that will be carried out for the first time in 2022, more than a thousand foreign buyers contract in Spanish companies.

Source: El Diario





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