Legal aspects of M&A transactions under Spanish jurisdiction
Javier de la Cruz & Catalina Hernández-Gil
Spain
by Javier de la Cruz & Catalina Hernández-Gil
The Spanish mergers and acquisitions (M&A) market has shown remarkable dynamism in recent years, driven by the post-pandemic economic recovery, the attraction of foreign investment and the digitalisation of key sectors such as technology, renewable energy and healthcare. Spain offers an attractive environment for M&A transactions due to its strategic position in Europe, its stable legal framework, and its access to the Ibero-American market. These opportunities, however, require a thorough knowledge of the applicable regulations and legal implications to ensure the success of the transactions.
The legal framework for M&A transactions in Spain is designed to ensure transparency, protect the parties' interests, and promote competitiveness. The Capital Companies Act is the fundamental rule that regulates the operation of capital companies, including their incorporation and dissolution, and key aspects such as the rights and obligations of shareholders, the structure of management bodies, and amendments to the bylaws. This law provides the stable and flexible legal environment essential for companies involved in M&A transactions, as it ensures the protection of shareholders and creditors while facilitating the adaptation to new corporate structures.
In addition, the Commercial Code establishes the general bases of commercial law, regulating aspects such as commercial contracts, public registers, and the obligations of companies. The Structural Modifications Law (Royal Decree-Law 5/2023) specifically regulates mergers, spin-offs, transformations, and other corporate restructuring processes. In line with European directives that seek to harmonise EU regulations, Royal Decree-Law 5/2023 also establishes detailed procedures to protect the rights of workers, shareholders, and creditors, and guarantee operational continuity. In addition, the Insolvency Law is relevant in transactions involving companies in financial difficulties, allowing for orderly restructurings. Taken together, these rules balance flexibility for companies with legal certainty, creating an environment conducive to investment.
On the other hand, M&A transactions in Spain have legal implications that require careful management. Conducting exhaustive due diligence is an essential step to identify risks in areas such as contracts, litigation, regulatory compliance, or intellectual property, as any omission may result in unforeseen liabilities. In the labour field, Spanish regulations, aligned with European directives, guarantee the continuity of contracts and workers' conditions, which obliges the parties to integrate these rights in the planning of the transaction.
From a tax point of view, transactions can benefit from incentives such as the tax neutrality regime, but this requires a detailed analysis to optimise the tax burden and comply with tax obligations. It is crucial to review change of control clauses in key contracts, such as agreements with suppliers or strategic partners, and to obtain the necessary consents from third parties to avoid legal conflicts. This meticulous approach ensures that transactions are executed in a smooth and compliant manner.
In conclusion, M&A transactions in Spain represent a strategic opportunity, but their success depends on meticulous legal planning. The regulatory framework, which combines clarity and protection, requires a rigorous approach to comply with regulatory requirements, manage labour implications and optimise tax aspects. Key elements include detailed due diligence, notification of competent authorities and attention to contracts and consents. With specialist legal advice, companies can capitalise on the potential of the Spanish market and execute successful and sustainable transactions.
Javier is a lawyer in the commercial department of BLAW. He specialises in providing legal assistance in corporate restructuring processes and in the acquisition of real estate assets to national and international clients. Contact Javier.
Catalina is head of the corporate department at BLAW. She has extensive experience in advising international clients on the incorporation, winding-up, merger and acquisition of companies. She has extensive experience in the sector, as well as a broad academic background. Contact Catalina.
XLNC member firm B Law & TaxMadrid, SpainT: +34 917 817 194
