M&A in Spain and Portugal is undergoing a significant transformation. In the first quarter of 2025, deal volume fell by 52.7% year-on-year. However, the total value of transactions increased by 13.2%, according to the latest Datasite and Mergermarket report published on 27 May. This paradox marks a clear shift: fewer deals, but bigger and more strategic ones.
Companies have not stopped moving, but they now select more carefully where and with whom. The result: more thoughtful, less impulsive and more global in their approach.
Selective investment and high impact operations
The behaviour of the market in Spain and Portugal is not an isolated event. The fall in the number of deals does not mean paralysis, but rather an evolution towards more relevant operations. Companies that used to carry out three smaller acquisitions a year are now concentrating their efforts on just one, but with greater potential for return and synergy.
The sectors with the most movement are a good reflection of this:
- Technology, media and telecommunications (TMT) lead by number of transactions.
- Consumer and industrial activity remains steady.
- Energy, however, is the king in value: more than 3.1 billion euros in transactions in just three months.
Recent cases reinforce this trend. Iberdrola has acquired regional distribution assets to strengthen its territorial presence. Endesa, for its part, has bought 626 MW of hydroelectric assets for 1 billion euros. None of these operations are coincidental. There is a strategy behind them. Stability, scalability and long-term efficiency are sought.
And that is a lesson for those who still think of growth «as before»: more is not always better. In 2025, what counts is to grow well.
European context and macroeconomic pressure
The M&A market in Spain and Portugal cannot be read without understanding the European environment. Macroeconomic uncertainty continues to affect business confidence . At the continental level, deal volume fell by 34.2% in the same period. However, value rose by 22%.
Why is this happening? Because opportunistic trading is disappearing. Today no one buys on the basis of inertia. Moves are justified on the basis of return, strategic necessity or operational efficiency.
This has raised the bar for everyone involved. From legal and financial advisors to management teams, more preparation, more vision and more resilience are required. A simple mistake in valuation or tax structuring can derail a deal that has been months in the making.
Regulation, state aid and legal opportunities
The regulatory framework is also influencing the M&A market in Spain and Portugal. Provision 9364 of BOE No. 115 of 2025 introduces new conditions for state aid linked to M&A processes. It regulates, for example, the criteria for granting de minimis aid, limiting certain uses and requiring more traceability.
Such measures, although bureaucratic, are key for family businesses and SMEs. In many cases, an acquisition or merger cannot be completed without subsidies or other financial incentives.
Moreover, major legal changes are on the horizon: the transposition of the European Directive on administrators and purchasers of bad debts (NPLs) will have a direct impact on operations linked to problematic assets. And, in parallel, the jurisprudential consolidation of approved restructuring plans opens up new ways for companies in difficulty to negotiate from a more orderly and protected position.
All this requires high-level legal and tax advice. But above all, it requires a strategic vision.
At Confianz we build results. With experience, realism and an approach that puts businesses – not incumbents – at the centre.