The Government has authorized 13 foreign investment operations in strategic companies

  • The Council of Ministers has given its approval to all foreign purchases that have passed through its table

  • The most notable is the purchase of X-ELIO solar plants by the Chinese state company Three Gorges

The Government established in March 2020 a kind of ‘golden action’ to shield Spanish companies in strategic sectors against foreign capital. In these eleven months – in the absence of knowing what your opinion will be on the most notorious investment of all, IFM’s partial takeover of Naturgy (which has not yet been registered with the Ministry of Industry) -, the Council of Ministers has given light green to 13 foreign investment operations in different sectors.

The prior control of foreign investments in Spanish companies in strategic sectors was adopted under the European regulations adopted in 2019 for the whole of the European Union. After the stock market falls derived from the covid, the objective of the Government was to try to avoid the sale at balance price of companies in sectors such as energy and telecos to third countries, especially state companies and sovereign wealth funds. “The focus of the regulation is on the states, where we don’t want our strategic sectors fall into the hands of third states“, explains the Mercantil partner of Latham & Watkins, José Antonio Sánchez-Dafos.

The Council of Ministers must authorize (or not) foreign investments of more than 500 million or that represent more than 10% of the capital of the Spanish company.

Three of the authorizations granted correspond to the energy sector. This is the case of the investment of 103 million of the Canadian Aimco in renewables or the purchase of assets of Viesgo by the Portuguese EDP in an operation of 2,700 million euros.

But the one that attracts the most attention is the authorization granted to the company estatal china Three Gorges -owner of the largest hydroelectric power station in the world, the Three Gorges dam- to acquire a portfolio of 500 megawatts of photovoltaic solar energy in a total of 13 power plants of the X-ELIO company. In addition, the Chinese giant will soon have to go through the examination of the Council of Ministers again, as it has just announced the purchase of 400 green megawatts from the Masaveu family for around 500 million, reports Europa Press.

In the telecommunications sector, the Government has authorized the acquisition of MásMóvil by the British funds KKR, Civen and Providence for 5.3 billion, as well as the purchase of Installation of Telephone Lines (Itete) by the French group Circet.

In addition, authorizations from the Council of Ministers have affected disparate sectors. This is the case of the capital inflow of the Macquiere fund in the Barcelona electronic signature start-up Signaturit or in the hospital Viamed Health. The purchase of Port Terminals by Maegor Investments, firm of the French company Rubis Terminal Infra, for 352.3 million, and that of GTT, a software company for the management of local and regional tax collection, by the British fund Anacap III.

The shopping list is completed Bank Degroof Petercam por Andbank, of Andorran property; and the investment of Casse Investments in the drip irrigation business through the Spanish subsidiaries of the Israeli Rivulis Irrigation and Eurodrip Irrigation for 19.14 million. Also the investment of Ebay in Adevintia in the classifieds sector, and the investment of Komipo Europe, owned by the Korean Electric Power Corporation Group, in the financial holding Kiwoom.

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“It’s not about vetoing a Chinese investor just because (…) but about how strategic a sector is and what the company’s plans are. If a Chinese wants to invest in defense, they probably won’t let him because he will have knowledge about Spanish intelligence; but if the Chinese investor add instead of subtract because it is going to open a manufacturing plant in Spain, that’s good. If you want to open it in Shanghai, maybe not, “explains Sánchez-Dafos.

In the case of Naturgy, the company owns the two pipelines that transport gas from Algeria, but according to Sánchez-Dafos the takeover would not change its shareholding much because the company already has two foreign funds such as CVC and GIP that add more than 41% of the capital, in addition to Sonatrach with 4%. “What must be protected is that strategic sectors of Spain are taken away, not that they expand them,” he says.

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