Spain set to extend restrictions on foreign takeovers, sources say

As part of the measures to protect the economy in the face of the COVID-19 pandemic, government approval is required for the acquisition of more than 10% of a company deemed strategic, as was the case with Australian fund IFM's takeover bid for Naturgy. One of the sources said the extension would be approved on similar terms.

Spain's cabinet is poised to approve a one-year extension to restrictions on foreign takeovers of Spanish companies deemed to be of strategic importance, government sources told Reuters. As part of the measures to protect the economy in the face of the COVID-19 pandemic, government approval is required for the acquisition of more than 10% of a company deemed strategic, as was the case with Australian fund IFM's takeover bid for Naturgy.

One of the sources said the extension would be approved on similar terms. The economy ministry declined to comment.

The news, first reported by El Confidencial.com, comes after U.S. fund KKR on Sunday offered to buy Telecom Italia for 10.8 billion euros ($12.16 billion) in what would be Europe's biggest private equity buyout. Shares in Spanish rival Telefonica rose 6.4% on Monday but pared most of those gains on Tuesday as the government looked set to extend the restrictions.

The expected extension indicates that the government would not back a bid for Telefonica, which is considered a strategic asset for Spain, Caixabank BPI said in a note to clients. The restrictions, which were extended in June until the end of December, also applied to bids from companies based in the European Union.

 

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