Under the pretext of preventing strategic companies from falling into foreign hands during the coronavirus crisis, the Government has approved a decree that gives it almost total control over business investments. The Executive will not only be able to veto foreign operations, but will also monitor the actions carried out by companies based in Spain controlled by European investors.
When does this control exist? The Official State Gazette (BOE) published this Wednesday includes a decree-law that dictates that it will be understood that these companies are in foreign hands when foreign investors «ultimately own or control, directly or indirectly, a percentage greater than 25% of the capital or of the investor’s voting rights, or when by other means they exercise direct or indirect control of the investor ”.
In practice, this measure will affect the majority of listed companies. More than half of the Ibex is in foreign hands, and most of the large companies have foreign reference shareholders. For example, the largest shareholder of the main Spanish banks is BlackRock, an investment fund manager of US origin.
This control over the investments of companies based in Spain represents the fine print of a decree-law approved in the Council of Ministers this Tuesday that seeks to reinforce the antiopa shield approved by the Government in March. Specifically, the rule dictates that direct investments greater than 10% of the capital made by European investors or those of the European Free Trade Association, including the United Kingdom and Switzerland must have the authorization of the Executive. The measure will continue until June 30.
Investments valued at more than 500 million euros, whether in listed companies or not, will also be at the expense of government approval. The Government has defended that other European countries have approved similar measures to avoid an avalanche of sales of strategic companies during the pandemic.
The BOE stipulates that the Executive may veto any operation of this type, whether it occurs in the sector that occurs. Despite this, it also highlights that the Government will pay special attention to movements that occur in five specific sectors: infrastructure, technology, energy, companies with data control capacity and the media.