regime prior permission by the Council of Ministers Foreign investments in Spanish companies are considered strategicThe government now plans to use it against Saudi Telecom’s acquisition of 9.9% of Telefónica as part of the tightening of this legislation, which the government adopted in March 2020 in the context of measures to curb the economic consequences from the pandemic.
Therefore, the Government devised a kind of ‘golden action’ to protect Spanish companies in strategic sectors. While this mechanism requires prior authorization from the Government for foreign operations exceeding 10% of the Spanish company’s capital, it also maintains the 5% bar that previously existed for defense-related companies, as is now the case with Saudi Telecom and Saudi Telecom. telephonic Since then (2020), minister council allowed 123 operations foreign investorsAccording to the data of the Ministry of Industry, Trade and Tourism for the end of 2022. To this figure we need to add another 25 approved by the simplified procedure authorized by the General Directorate of International Trade and Investment.
mitigation measures
Almost all of the permits requested during this period were granted by the Government. Some of them (15 in total) received approval from the Government after their adoption. “reduction measures”. almost no records two operations denied In the data available to EL PERIÓDICO from the Prensa Ibérica group during these three years.
Generally speaking, “mitigation measures” or conditions imposed by the Government on foreign companies include “limiting investors’ access to sensitive information” that may be central to Saudi Telecom’s operations at Telefónica. In addition, measures aimed at “guaranteeing the supply of certain goods or services” are considered essential, while others are considered as measures aimed at maintaining certain capacities and preventing the loss of sovereignty in certain areas or relating to the investor’s obligation to provide information periodically or at regular intervals. event of certain events. According to one of the Ministry of Industry’s reports summarizing activities for 2022 in terms of investment control, the conditions generally applied depend on “the unique characteristics of each operation and the threats and vulnerabilities identified.”
In 2022, there was an operation that was not permitted for the first time “because it was impossible to establish effective mitigation measures”. This could have been the purchase of 29.9% of the capital. To hurry with live. The French company submitted its request to increase its presence in the group to the Ministry of Industry in October 2021. mediaThe company, which owns 9.94% of its capital, announced its resignation in March 2022. Vivendi announces it will raise its capital this year 10.9% and 15% He said he had the government’s approval. The government was publishing the operations under its control in the references of the Council of Ministers, but in 2021 it reduced these announcements and in 2022 neither a single operation nor the aforementioned operation published, despite the abundance of files. between I lived and To hurry.
Half from the USA
The number of transactions requiring authorization has increased ‘Growing Up’ In these years, it increased to 28 (13 through the Council of Ministers, 15 through the Ministry of Commerce, with simple procedure) in 2020, to 48 (45 in the Council of Ministers, 3 through simple procedure) and 73 in 2021. 2022 (65 of them in the Council of Ministers and 7 of them in simple procedure, the unauthorized file needs to be attached). This increase in operationsrecovery of the international economy after the pandemic. Thus, the data for Spain reflect that foreign investment increased by 13.9% in 2022 compared to 2021 and exceeded 34 billion 178 million euros.
Investments in half of the transactions accumulated in the last three years UNITED STATES OF AMERICA, if about 15% United Kingdom and other overseas territories and about 10% Chinese and a little less United Arab Emirates. In all this period, perhaps the most important investment that required the permission of the Cabinet in light of the March 2020 reform was the launch of the Australian fund IFM, which was approved by the Government on terms in August 2021, six months later, in Naturgy. following the announcement of the partial takeover offer, in which the gas company plans to acquire 22.7% of its capital.
especially in energy and telecommunications
But there are all kinds of operations, such as the acquisition of the company. Chinese state Three Gorges – owner of Three Gorges Dam, the world’s largest hydroelectric power station – will purchase 13 photovoltaic solar power plants from X-ELIO company in 2020, or MásMóvil is financed by British funds KKR, Civen and Providence. Also to buy EQT background photovoltaic projects company solar pack up to 881.2 million euros in 2021 or the acquisition of British funding intermediate level Capital Group inside circus, a company dedicated to the installation and maintenance of telecommunications equipment and systems for operators in the industry in the same year. Sectors with the most transactions in 2022information and communication technologies (ICT), manufacturing industry, financial activities, wholesale and retail and construction.
background of defense
Among the permitted foreign investment operations included in the references to the Council of Ministers meetings in the last three years are those related to the defense industry, such as the investment of the Luxembourg company. Pril Holdings in the spanish arms company Maximum or the Belgians buy CMI Defense defense equipment and systems company John Cockerill Spain, among others.
But the example most similar to the Government’s analysis of Saudi Telecom’s entry into Telefónica is the acquisition of French Telecom. GFI IT 100% of Computing English Court, The company that is the supplier of the Ministry of Defense. The Council of Ministers authorized this operation at its meeting on April 14, 2020, but stipulated that GFI “sufficiently protect the company”. confidential information security From the Department of Defense.”
a global trend
The strengthening of foreign investment control mechanisms has become permanent throughout the European Union and in developed countries in general after the pandemic and the ensuing crisis in recent years. Russian invasion of Ukraine. According to the data received unchanged According to (United Nations Conference on Trade and Development), 36 countries control FDI for reasons of national security, and together they represent 63% of worldwide FDI inflows.
from European CommissionMember states are encouraged to implement and strengthen their national investment control mechanisms. Most of the changes made to national legislation in recent years have been aimed at improving existing mechanisms, expanding the list of sectors covered and extending the validity of certain mechanisms. In Spain, the latest change to this regulation took place last July and will actually be published after the new royal decree goes into effect on September 1, with the 9.9% acquisition of Telefónica by STC.