SPAIN Trends and Developments Contributed by: Ignacio Sanjurjo, Ignacio Echenagusia, Alejandro Espín and Román Cantín, Deloitte Abogados y Asesores Tributarios, S.L.U.
transactions, 85 were expressly authorised by Span - ish Ministry of Industry, without any additional require - ments. Energy, transportation, telecommunications and defence continue to play a prominent role in the cur - rent M&A and PE landscape and are widely recog - nised by European jurisdictions as strategically sensi - tive sectors. The use of material adverse change (MAC) provisions, historically uncommon as a condition precedent, has increased in recent years as an instrument to protect purchasers against adverse changes affecting the target company during a defined period. Notably, in the first half of 2025, there has been an increase in the inclusion of MAC clauses specifically designed to address the potential negative impact of US tariff policies. This trend reflects greater market awareness of geopolitical and trade risks, particularly in sectors dependent on international supply chains or cross- The use of the locked-box mechanism has signifi - cantly increased and remained the predominant pric - ing structure in the market in PE M&A transactions in Spain throughout 2024, on both the sell side and the buy side. This approach involves the parties agreeing on a fixed purchase price, determined based on financial state - ments on a specific pre-agreed reference date. These financials are generally required to be audited or, at a minimum, mutually accepted by the parties. A key feature of the locked-box mechanism is the pro - tection it offers against value leakage. In this regard, the purchase price may be adjusted if any unauthor - ised value transfers – referred to as “leakages” – occur between the reference date and the closing date, par - ticularly if such actions fall outside the ordinary course of business. border trade. Locked-box
Additionally, since the purchaser can benefit from profits generated from the reference date while the purchase price is only paid at closing, the seller typi - cally seeks compensation through mechanisms such as ticking fees. These fees are generally structured as a fixed daily amount accruing from the locked-box date or signing date until closing. Additionally, it is common to see hybrid arrangements that combine both the locked-box and completion accounts mechanisms, particularly in more complex or higher-value transactions. Increasing influence of environmental, social and governance (ESG) The integration of ESG criteria into the valuation of PE transactions remains limited. Nonetheless, there is a clear recognition of ESG’s importance, particularly in driving higher valuation multiples. Beyond its role in enhancing valuation multiples, a comprehensive ESG strategy is expected to contribute positively to a com - pany’s financial performance. PE investors are compelled to adapt their strategies in response to growing ESG-related demands, and the reputational impact of ESG has led acquirers to place greater emphasis on strengthening their ESG creden - tials, making these considerations a critical factor in M&A decision-making processes. Consequently, ESG parameters are increasingly resulting in a notable rise in dedicated ESG due diligence activities. Additionally, (i) buyers are increasingly prioritising green transactions, focusing on sustainable and socially responsible assets in sectors such as renew - able energy, energy efficiency, clean transportation and responsible waste management; and (ii) findings from ESG due diligence are increasingly reflected in tailored representations, warranties and seller com - mitments concerning ESG matters within transaction agreements.
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