Confianz

Etiqueta: fusiones y adquisiciones

  • Tax strategies before and after an M&A

    Did you know that 40% of mergers and acquisitions fail due to undetected tax issues? A poorly planned M&A transaction can drag along millions in hidden liabilities, trigger the Complementary Tax, or clash with European regulations on legitimate economic purpose.

    The reality is stark. Ignoring these factors can turn your dream transaction into a financial nightmare. However, with the right tax strategy, M&A can be the perfect catalyst to accelerate your company’s growth.

    What to review before signing

    Tax due diligence

    The preliminary tax review should unravel critical risks such as buried tax debts, tax credits without solid documentation, and incentives applied without a real economic basis.

    In 2024, for example, a Spanish technology company had to return €2.3 million in R&D deductions incorrectly applied by the acquired company. The fine and interest doubled the initial impact.

    In 2025, the Supplementary Tax has added complexity. Your obligations are assessed based on the post-merger situation of the consolidated group. Two individually exempt companies may, after the transaction, be subject to this 15% tax on profits exceeding £20 million.

    The European filter that can stop your transaction

    The EU Anti-Tax Abuse Directive requires that all acquisitions have genuine economic motivation. A transaction motivated solely by tax benefits may be declared elusive. In Spain, the Treasury is applying this criterion with increasing rigour.

    Remember to document the commercial reasons for your transaction from day one. A solid business case will shield the transaction from tax scrutiny.

    Acquisition structure

    The choice between purchasing assets, acquiring shares or merging determines the treatment of capital gains, the inheritance of tax credits and the degree of exposure to tax liabilities. An intelligent structure minimises the immediate tax burden without mortgaging the future.

    After signing

    The SPA

    The purchase agreement must include dynamic adjustment clauses for tax contingencies and compensation systems. W&I insurance is now standard in transactions exceeding €10 million in Spain.

    According to KPMG (2025), more than 30% of SPAs include specific clauses on the Complementary Tax. The average cost of a W&I policy represents between 0.8% and 1.2% of the transaction value, but can save you up to 10 times that amount.

    Tax integration

    Once the transaction is closed, integration determines the final success. A poorly executed process can lead to tax duplication, trigger tax inspections and create loopholes that compromise the company’s image with investors.

    Successful integration requires unified filing of corporate income tax and consolidated VAT, consistent accounting criteria and centralised management of tax obligations.

    In complex transactions, we recommend setting up a «tax war room» during the first 90 days after closing to detect and resolve discrepancies in real time.

    In the world of M&A, tax is part of the strategic DNA of any successful transaction. Companies that understand this from day one turn tax planning into a competitive advantage.

    Our integrated approach designs tax-efficient structures, anticipates regulatory changes and executes transitions that protect the value of your investment.

    Are you planning an M&A transaction? The best decision starts with a conversation. Contact us and you will find in Confianz your strategic partners with more than 30 years of experience.

  • Conflict resolution in M&A

    Mergers and acquisitions are complex processes, with many conflicting interests. And when something goes wrong, resolving it quickly and effectively must be a priority. Which option should you choose: arbitration, court or mediation?

    When is it advisable to resolve a conflict through arbitration?

    Arbitration is a very useful option when the parties come from different countries, do not trust each other’s judicial systems or simply want to keep the dispute private. It works well because it allows you to choose arbitrators with experience in the subject matter. For example, if the transaction involves a pharmaceutical company, specialists in the sector can be involved, something that rarely happens in court.

    Another advantage is that the process is usually faster than a traditional trial. In addition, the arbitral award (the arbitrator’s «judgment») can be easily enforced in other countries, thanks to international treaties such as the New York Convention. And best of all for many companies: the process can be kept completely confidential, with no one knowing about the dispute or the terms of the agreement.

    However, it is not cheap. Arbitration involves paying the arbitrators, the centre that organises it and, of course, the lawyers. Therefore, although it is useful in large or highly technical transactions, it may not be worthwhile in smaller acquisitions.

    When is it better to go to court?

    Resolving an M&A dispute in court is still a valid option. It is usually cheaper than arbitration and, if you disagree with the judge’s decision, you can appeal. That right to a second hearing does not always exist in arbitration.

    However, there is one detail to be aware of: first instance judgments can be enforced even if they are appealed. In other words, you may end up paying a significant amount before the case is fully resolved. If the higher court subsequently rules in your favour, you will get your money back… but in the meantime, the damage may already have been done.

    Therefore, although the courts offer certain guarantees, they also involve longer timeframes and less control over what happens during the process. If the priority is to settle quickly and without surprises, this may not be the best option.

    How mediation helps avoid a trial

    Mediation is an increasingly popular way of resolving M&A disputes. Why? Because it allows the parties to sit down with a neutral third party, discuss the problem and seek a solution without going to court. It is faster, cheaper and less aggressive than any other route.

    Another key point: everything discussed in mediation remains between the parties. If an agreement is reached, it is legally binding and can be enforced in court if someone does not respect it.

    Furthermore, it could soon become a mandatory step. In Spain, a law is being passed that would require parties to attempt to resolve conflicts through means such as mediation before filing a lawsuit in civil or commercial matters. So, in addition to being useful, it could be a necessary preliminary step before going to court.

    Of course, mediation only works if both parties are willing to talk. If one party is unwilling to cooperate, there is not much that can be done.

    At Confianz, we have been helping companies to close their deals securely and resolve conflicts without turning them into wars for years. Because prevention is also part of a good strategy. If you are in the middle of a negotiation or foresee possible friction, let’s talk before it becomes a problem.

  • The rise of M&A in Spanish family businesses in 2025

    The rise of M&A in Spanish family businesses in 2025 is the result of a structural transformation. Family businesses, which account for 92.4% of the business sector in Spain and generate 70% of private employment (Family Business Institute, 2025), are leading a new cycle of growth.

    According to the report by Maio Legal and Strategy with Purpose (2025), 27% of family owners are planning acquisitions, while 29% are leaning towards strategic alliances. This dynamic reflects a new mindset: less conservatism, more forward-looking.

    Family fusiness drives mergers and acquisitions

    In 2023, 43% of M&A deals in Spain involved family businesses, surpassing private equity (26%) and industrial corporations (19%), according to the INE. This is not anecdotal: it is a solid trend that continues in 2025.

    The report M&A and family business: how to align ownership and management at the moment of truth points out that this boom is supported by a favourable financial context. Corporate indebtedness fell for the second consecutive year to 64.7% of GDP, the lowest level since 2001 (Bank of Spain, quoted by Cinco Días, 31 May 2025).

    But there is more to the story: a generation of business leaders – mainly baby boomers – are now facing key decisions about the future of their businesses. Expand? Find a partner? Sell? For many, M&A becomes the structural answer to these dilemmas.

    Leading sectors and real opportunities

    The rise of M&A in the Spanish family business in 2025 is more visible in fragmented sectors, in consolidation or with technological pressure. According to Business People (2 June 2025), the clearest opportunities are in:

    • Energy: The energy transition requires financial muscle and technical know-how. Many family-owned SMEs are merging or integrating renewable projects to stay competitive.
    • Technology: Digital change is no longer optional. Traditional companies are acquiring technology start-ups to update processes, sales channels and business models.
    • Pharmaceuticals: The concentration of laboratories and distributors is driving acquisitions to gain scale, diversification and access to R&D.
    • Agri-food and manufacturing: Sectors where global competition and tight margins are pushing for integrations. Here, many family-owned companies seek to lead consolidation, rather than be absorbed.

    Maio Legal and Strategy with Purpose note that the most active family businesses share a pattern: sound financial structure, strategic vision and professionalised governance. The key is deciding whether to lead change or to give ground to external capital.

    Succession

    While the enthusiasm is real, so are the challenges. The biggest internal hurdle remains succession. According to the Family Business Institute (2025), 70% of first-generation family businesses do not have a defined succession plan. This puts their continuity beyond the founder at risk.

    EY and the University of St. Gallen, in their Global Family Business Index 2025, warn that only 30% of these companies manage to survive the transition to the second generation. The lack of alignment between family and professional management can have a direct impact on daily operations, slowing down up to 30% of the activity (Maio Legal, 2025).

    This emotional and structural environment makes any M&A process a complex decision. It is not only about growing or selling, but also about redefining the role of the family, professionalising corporate governance and avoiding internal tensions.

    As Nuria Morcillo points out in Cinco Días (31 May 2025), «M&A in family businesses is not a simple transaction. It is an identity transformation that requires maturity, advice and business vision».

    At Confianz we have accompanied hundreds of companies in merger, acquisition or restructuring processes, combining strategic vision, legal knowledge and family sensitivity. If you are evaluating growth or restructuring, let’s talk. We can help you make decisions.

  • What is an indemnity in M&A and how does it protect you?

    In any sale and purchase of a company, there is one element that can save the parties from a million-dollar problem: indemnity in M&A. Sound familiar? It’s time to get it right.

    What exactly does an indemnity cover in M&A?

    Imagine this: you are about to close a deal. You have done your due diligence, but you see a possible tax lawsuit. It hasn’t materialised yet, but alarm bells are ringing. In that scenario, an indemnity clause is not a suggestion: it’s your bulletproof vest. It obligates the seller to bear the cost if that problem is triggered after closing. Without it, that potential lawsuit can become your nightmare, legally and financially.

    Indemnities apply to known risks. We are not talking about vague promises like warranties, but precise guarantees: if X happens, you pay.

    Typical examples:

    • Ongoing litigation
    • Fines for tax inspections in process
    • Outstanding labour debts

    The key is to put it in writing. Because if you know it and you don’t agree to it, you won’t be able to claim. It’s that simple. It’s that dangerous.

    Indemnities vs Civil Code

    This is where the second level of the game comes in: the Civil Code. Article 1484 states that the seller is liable for hidden defects. But beware: if the buyer knows about them, there is no longer any liability. In the M&A world, this is not always the case. That is why sandbagging clauses exist. What do they do? They allow you to claim even if you were already aware of the problem, as long as the seller has concealed it or lied about it in his statements.

    But is that legal in Spain? It depends. Some courts validate them on the grounds of contractual autonomy. Others do not, considering them contrary to mandatory rules. What is clear is this: if you don’t talk about it and don’t agree to it, you lose. This is why it is often decided to directly exclude the application of the Civil Code. But this is not a minor decision. Because in doing so, it also removes its protections. It can be a double-edged sword.

    At Confianz we evaluate each case. It’s not about filling a contract with meaningless clauses. It’s about designing an agreement that works, that holds up and that defends you. We also help to set clear limits: what risks are covered, for how long, with what economic ceiling and under what conditions. Because a poorly negotiated indemnity can be a dead letter.

    How we approach it at Confianz

    At Confianz we do not use templates. Each operation has its own edges, risks and urgencies. And indemnities are too important to improvise. Our approach:

    • We take a closer look at due diligence
    • We detect real risks, not assumed risks
    • We design clauses that make both legal and practical sense.
    • We negotiate without fear and with substance

    We know that a badly drafted clause can cost millions. And we also know that negotiations are often avoided so as not to «strain» the relationship. We say the opposite: you have to tighten it where it is needed, so that it does not break later. Moreover, we help to filter out what is reasonable. Because not everything should be covered by indemnity. They can be limited to clear cases: malice, blatant errors or known but unresolved facts. This protects the buyer, without suffocating the seller.

    That is why we say that indemnities are not small print. They are the heart of the contract. And if they are badly done, there is no turning back.

    An indemnity in M&A is not just a legal formality. It is your life insurance in a complex transaction. It may sound like a technicality, but it is not. If you are in the middle of an M&A transaction or about to enter into one, don’t jump in without it in place. A clear indemnity can save you years of litigation and headaches.

    At Confianz, we have been fine-tuning these clauses for years. Not with theory, but with practice. Real cases. Real people. Real risks. Are you buying or selling a company? Let’s talk.

  • Impact of the Complementary Tax on Mergers and Acquisitions in Spain

    The impact of the Complementary Tax (Pillar 2) is a new tax figure affecting mergers and acquisitions in Spain. Since its implementation by Law 7/2024 of 20 December, this tax is levied on the difference between the 15% and the effective rate of taxation on profits in each jurisdiction.

    For those involved in M&A transactions, this tax is not just a technicality. It can change the valuation of a company, generate unexpected costs and complicate the tax structuring of a purchase or merger. Crunching the numbers before and after considering this tax is not the same. Let’s review the main problems it can bring and how to reduce risks.

    How Complementary Tax affects M&A

    The Complementary Tax applies to corporate groups with a consolidated turnover of 750 million euros in at least two of the last four financial years. What does this mean for companies in M&A? There are three possible scenarios:

    • Joining forces, but also taxes. Two companies that separately do not reach 750 million can exceed the threshold by joining forces. In that case, tax comes into play and changes the accounts.
    • One step further and under the radar. If a company is already close to that threshold, an acquisition can push it over the threshold and make it subject to the tax. That forces a rethink of the whole operation.
    • New rules. If the buyer is already subject to tax, adding a company in a jurisdiction with a tax rate of less than 15% may involve an additional payment. What appeared to be a profitable transaction may not be profitable if the calculation is not done properly.

    It is not just a question of accounting, but of strategy. There is no room for surprises in M&A.

    Fiscal due diligence.  Better to be safe 

    Due diligence deadlines are often tight, but this tax makes it more important than ever to scrutinise accounts closely. Some points to bear in mind:

    • Where every euro is. Not all jurisdictions are taxed equally. If the target company has operations in countries with a rate of less than 15%, it is necessary to calculate what impact this will have on the final bill.
    • Information in dribs and drabs. It is not always possible to obtain all the necessary documentation within the due diligence deadlines. If there is no transparency in the numbers, the risk skyrockets.
    • Future impact. If after the purchase the structure of the group changes, the tax rules may also change. And that means unexpected additional costs.

    Poor planning here can be costly. It is key that the seller has a detailed tax impact analysis ready before entering into negotiations.

    How to structure the operation to avoid surprises

    Avoiding problems with the Complementary Tax is not just a question of numbers, but of how the operation is designed from the start. Some useful strategies:

    • Clarify who pays what. In procurement contracts, it must be precisely defined who bears the fiscal responsibilities. It is not enough to assume this, it must be written down.
    • Price adjustments. If due diligence does not provide an accurate picture of the impact of the tax, clauses can be included to adjust the price according to the actual costs after the purchase.
    • Find the best structure. In some cases, making the purchase through an entity in a country with a tax rate higher than 15% may reduce the impact of the tax.

    An important detail: at present, guarantee insurances do not cover the risks arising from this tax if they have not been identified beforehand. There is no safety net if something goes wrong.

    Beyond theory, at Confianz we help companies to reduce risks and design structures that avoid problems with this tax. If you are in the process of M&A and want to avoid surprises, let’s talk and see how to approach the operation with clarity.

  • The international M&A market has already started to recover

    After a difficult few years, the international M&A market has reached a turning point and is starting to show signs of an upturn in activity. This is even announced by giants such as PwC in its recent Global M&A Industry Trends 2024 report.

    Forecasts suggest that M&A is on an upward trajectory and will see a gradual increase in activity as the year progresses. There are three reasons for this:

    • Improving financial markets, driven by slowing inflation and expected interest rate cuts.
    • The demand (and supply) for deals accumulated over the past few years. Today, private equity funds are estimated to have approximately $12 trillion in assets under management, almost double what they had in 2019, before the pandemic. Meanwhile, private equity has almost $4 trillion in liquidity. That is, capital to be invested or returned to end-investors.
    • The strategic need for many companies to adapt and transform their business models. According to PwC’s Global CEO Survey 2024, 60% of CEOs plan to make at least one acquisition in the next three years.

    However, any merger or acquisition will also face difficulties such as the most expensive financing in the last ten years. This will put downward pressure on valuations and force investors to create more value to get the same return as before.

    Moreover, the uncertain macroeconomic and geopolitical landscape will reward those actors and companies that do not feel the pressure and are able to move quickly and accurately in changing environments.

    Sectoral trends 

    There are important differences by sector. On the one hand, in the last months of 2023 and the beginning of 2024 the upturn has already started in the energy, technology, pharmaceutical, aerospace, defence, mining, industrial production, automotive and technology sectors.

    Although evolving more slowly, opportunities already abound in sectors such as retail, real estate and construction, where many companies are still recovering or restructuring. Trailing the most active sectors in 2024 will be the subsectors of AI, semiconductors, electric vehicles, batteries and energy storage, biotechnology and insurance intermediation.

    Finally, sectors such as banking and health care are evolving more slowly and may take longer to recover. Consumer spending will also be affected by the limited purchasing power of middle-income households. However, the widespread need for business transformation should instil optimism among investors.

    A promising start to the year for the international M&A market

    Although January is usually quiet, this first month of 2024 has already seen the announcement of several mega deals worth more than $5 billion, showing an increased willingness to enter into large and complex transactions. Some of the international highlights include Hewlett Packard Enterprise’s $14 billion takeover bid for Juniper Networks, Blackrock’s $12.5 billion bid for Global Infrastructure Partners, the proposed $7.4 billion merger of Chesapeake Energy and Southwestern, and the $6.4 billion joint investment in Vantage Data Centers by DigitalBridge and Silver Lake.

    Both these mega deals and small and medium-sized transactions this year will require creative solutions to address today’s challenges. Confianz’s M&A specialists constantly analyse industry trends to provide our clients with the most appropriate advice for each company and sector.

  • Prosandbagging and anti-sandbagging clauses in M&A transactions

    In the context of M&A transactions, one should never neglect the possibility that the buyer is aware that a representation and warranty is false or inaccurate and, despite this, chooses to sign the contract in order to make a claim against the seller. This is where prosandbagging and antisandbagging clauses come into play.

    Where does the expression sandbagging come from

    In the sport of golf, a sandbagger is a player who plays underhand, who plays below his real ability in order to gain an advantage over his opponent. Because by lying about his skills, a sandbagger gets a better handicap. This allows him to have more strokes and thus increases his chance of victory.

    Similarly, in a corporate sale and purchase, the term sandbagging refers to the situation where the buyer becomes aware that a representation and warranty is false or inaccurate. This information can usually be obtained through due diligence, but can also be obtained in any other way. Despite this, he chooses to sign the M&A contract and then holds the seller liable.

    What are prosandbagging and antisandbagging clauses

    In view of this possibility, the two parties are increasingly regulating their position with regard to sandbagging in order to avoid future disputes. If a dispute arises, the judge or arbitrator will take into consideration the common intention of the parties.

    These are the most commonly negotiated clauses in M&A contracts:

    • The anti-sandbagging clause, which provides that the buyer may not recover for any non-performance of which he had or could have had knowledge. In other words, prior knowledge will prevent the buyer from claiming damages. This is the most common type of clause in Spain.
    • The prosandbagging clause, which works the other way around and provides that the buyer’s right of indemnification is not limited by the knowledge he may have or may have obtained in the framework of the statutory audit. In other words, prior knowledge on the part of the buyer will not affect the seller’s liability.

    How to act in the event of a prosandbagging dispute

    Although the prosandbagging clause is common, there is no consolidated Supreme Court case law on its effectiveness. This requires a case-by-case analysis, taking into account all the circumstances of the transaction and what was agreed by the parties in the purchase contract.

    If the buyer detects a contingency during the due diligence process and, under the cover of a prosandbagging clause, decides to claim the damage from the seller, he may invoke in his defence the autonomy of the will of the parties, the work of allocation and distribution of risks in the operations of these clauses or the assimilation of the clause to a promise of guarantee by the seller. In our opinion, the most advisable thing to do in these cases is to negotiate a reduction of the price or to agree on a specific indemnity. In the specific indemnity it will be important to regulate how the damage will be quantified if it materialises and to foresee the possibility of claiming the damage as soon as it can be quantified, even if there has not been an effective disbursement.

    On the other hand, the seller can argue that the buyer’s action is contrary to contractual good faith, that it is an abuse of rights or that the buyer gave tacit consent to this contingency because he knew about it before signing the contract and did not demand a specific indemnity to cover it. In order to prevent such situations, we recommend that sellers deposit the due diligence information with a notary, so that they can prove exactly what information the buyer had access to.

    Key clauses to manage the risk of the operation

    These are clauses that require arduous negotiation between seller and buyer, as they play a significant role in the allocation of risks. Confianz’s team of M&A specialists has extensive experience in mergers and acquisitions and can accompany you throughout the entire process with maximum guarantees.

  • Pricing and the locked box mechanism in M&A transactions

    In M&A transactions, the choice of the transaction pricing mechanism is key. Until recently, the locked box mechanism was mainly used in the United States. In recent years, however, this methodology has gained increasing acceptance in Europe, especially in competitive processes with several potential buyers. This is because this system significantly simplifies the drafting and negotiation of the sales contract.

    How does the locked box pricing system work

    The locked box involves the establishment of a closed price, not subject to adjustment at closing with few exceptions. This price is fixed in the purchase contract by reference to previous financial statements, closed at the locked box date. This date is not established after the closing of the transaction but before.

    Thus, at the time of signing, the risks of the business are transferred. The contract states that the company will continue in its normal course, but provides for certain restrictions that protect the buyer against a loss of value that may occur between the date of the locked box and the closing date.

    What kind of leakages to avoid

    This protection is articulated through the concept of leakage of value. Any transaction that involves the decapitalisation of the company is prohibited. For example, the payment of dividends, the cancellation or reduction of debts, the sale of fixed assets at below-market prices, etc. In practice, the buyer would be receiving less value than he has paid.

    Hence the name locked box: from the moment the two parties agree on a fixed price the box must remain locked.

    What leakages are allowed

    Permitted leakages, which are transactions known to both parties in advance and which have already been taken into account in the fixed price, are also often defined in the contract as reasonable exceptions. For example, wages and remuneration established in employment or service contracts, payment commitments assumed in the ordinary course, etc.

    It is also necessary to regulate the normal running of the business in the time between signing and closing of the transaction. During this period the seller continues to manage the day-to-day business. For this reason, it is common for the seller to charge the buyer a fee for this period. At Confianz we recommend agreeing an interest rate on the price.

    Advantages of the locked box mechanism

    • Avoid complex financial definitions, adjustment mechanisms, arbitration, etc.
    • It provides price certainty.
    • It saves time and costs by avoiding the need to close additional financial statements.
    • It is more appropriate in competitive processes where several candidates are competing for the purchase, as the comparison of offers will be more homogeneous.

    The locked box is generally considered to be a favourable pricing system for the seller, as it provides the certainty of a fixed price and avoids the occurrence of disputes in subsequent revisions.

    Limitations 

    However, the locked box method requires an in-depth analysis of the financial statements. If the locked box date is close to the annual financial close, the audited annual accounts will be used. Otherwise, the vendor will have to prepare ad hoc financial statements.

    In both cases, however, thorough due diligence is required to ensure reliability. Therefore, it is not advisable to use it in situations where the buyer is unable to carry out in-depth due diligence.

  • Lack of generational turnover drives M&A among companies

    Generational succession has always been a critical process for family businesses. Seventy percent of them do not make it to the second generation, and 90% do not make it to the third. This intrinsic difficulty for this type of company is now compounded by the ageing of the population. The large baby boom generation born between 1946 and 1964 is reaching retirement age, and with it many founders and heirs of family businesses are retiring. Even in the case of successful companies, many are finding it difficult to find someone willing to take over the reins.

    It is currently estimated that there are more than 1.1 million small and medium-sized family businesses in Spain with no generational succession. And between now and 2030 we will see many more family businesses failing to find an heir interested in continuing the business tradition. This entails a serious risk of closure, with the consequent loss of wealth and jobs. The Workers’ Statute establishes procedures for the termination of the company due to the retirement of the employer, which could result in collective or individual dismissals.

    Dealing with the lack of generational succession

    Faced with the challenge of the lack of generational succession and the strong personalisation of corporate culture, family businesses are opting for a variety of solutions:

    • A gradual transition, extending the active retirement of entrepreneurs and allowing them to continue to perform some functions for a more or less long period. According to Social Security data, more than 57,000 self-employed have used this modality to continue running their businesses.
    • The hiring of external directors to manage the company, keeping ownership in the hands of the family.
    • The sale of the company.

    The boom in corporate transactions in family businesses

    The enormous weight of family businesses in Spain is similar to that in Japan. And in this country, the lack of generational change has driven M&A operations to double-digit growth in the last 10 years. This is probably the scenario for which we must prepare ourselves in our country.

    On the one hand, mergers and acquisitions help to extend the life of companies beyond the involvement of the business family. On the other hand, they help other companies to grow in size and become more resilient.

    A paradigm shift in business families

    Family businesses are no longer as conservative as they were a few years ago, and have lost their fear of the entry of capital from a financial partner. As for the fear of losing control, this has also been overcome. We are seeing more and more operations in which the founding partner remains a minority shareholder.

    There is definitely a change in mentality. Selling the family business is no longer something almost shameful, but a symptom of success. We see this especially in the start-up culture, many of which are sold to a larger company or private equity fund when they reach a critical size.

    On the other hand, the economic crises of recent decades have made many family businesses realise that size is key to business survival. And growing exclusively organically is becoming increasingly difficult.

    All these circumstances lead us to expect a lot of merger and acquisition activity of family-owned companies in the coming years. We are going to see many companies that are leaders in their market niches come onto the market. At Confianz we are prepared to accompany them in these processes.

  • New rules on changes to the merger regime

    The regulatory scenario surrounding M&A transactions has taken a significant turn with the introduction of Royal Decree-Law 5/2023, enacted on 29 June. This decree replaces the previous Structural Modifications Law, introducing a variety of legal provisions concerning transformations, mergers and global divestitures, among other aspects.

    Criticisms and Controversies in the New Regulation

    Legislative Methodology 

    Any regulatory change of this magnitude generates reactions. Despite the urgency expressed for the approval of this regulation, there is criticism of the legislative method used. Some experts suggest that excessive recourse has been made to the Royal Decree-Law. These changes, although necessary, require careful planning and consultation to avoid unwanted impacts.

    Ambiguities and Grey Areas

    An effective legal framework must be clear and straightforward. However, the new regulation has ambiguous grey areas. One of these is its transitional regime, creating uncertainty as to which legal framework applies to operations started, but not completed, prior to 29 July 2023.

    New and Significant Changes

    Tax and Social Security Obligations

    The tax and social security landscape is constantly evolving. In this context, one of the most discussed changes is the new obligation for companies to demonstrate that they are up to date with their commitments, which will undoubtedly influence the strategic decisions of organisations.

    Creditor and Shareholder Protection

    The balance between incentivising business activity and protecting different actors is crucial. New safeguards are introduced which, while seeking to protect creditors and partners, can affect the speed and efficiency of operations.

    Worker’s Participation

    In an effort to democratise the process, workers, creditors and shareholders are given the right to comment on proposed amendments. This underlines the importance of transparency and participation in corporate decisions.

    At Confianz we fully understand the implications of the new regulations and, from our experience, we want to be that firm compass for companies that venture into the transformation process. Our mission goes beyond mere consultancy: we seek to be that pillar of support, offering tools and essential knowledge to adapt successfully. Because in a world full of challenges, we are proud to say that with Confianz by your side, every step is taken with certainty and confidence.