A decrease in large M&A transactions in Iberia in 2016 means law firm M&A departments are being sustained by medium and small-sized deals, particularly in energy and real estate.
Mega-deals are in decline in Iberia and are being replaced by a spike in medium and small-sized deals, according to lawyers. There were only three deals with a value of over 1 billion in Iberia in the period 1 January to 24 May 2016, data shows. Topping the bill, according to Mergermarket, was Inversora Carso's 6.8 billion bid for Spanish building and infrastructure group FCC. The only other 1 billion-plus deals were Inversora Carso's 1.3 billion offer for a controlling stake in Realia, and Cinven and Canada Pension Plan Investment Board's 1.2 billion acquisition of Spain-based travel service provider Hotelbeds Group, with the latter deal including roles for Allen & Overy and Freshfields Bruckhaus Deringer.
"We are not seeing many mega-deals taking place this year in the market, in-bound nor out-bound," says Allen & Overy partner Iñigo del Val. "The market was quite quiet during the first two months and now there is significant activity, but in medium/small deals." Del Val adds that, while investors are constantly on the look-out for opportunities, deals are not necessarily being closed. "The reasons could be many," he adds. "Brexit, the US and Spanish elections, the China crisis, petrol prices, or all these factors together."
Sectors where the new wave of medium and small-sized deals are taking place include energy, infrastructure and real estate. Renewable energy is an industry that has seen an especially high level of activity - transactions this year included EFG Hermes' 550m acquisition of EDP Renováveis, on which Linklaters, King & Wood Mallesons and Portugal's MLGTS were among the firms instructed. In addition, Bridgepoint Advisers sold its Spanish asset Bora Wind Energy Management to Exus Management Partners for 500m - Allen & Overy, DLA Piper, Linklaters and PwC Legal advised on the transaction. "Infrastructure and energy, in particular renewables, are seeing a lot of movement and interest," says Del Val.
'Best year ever'
An environment in which there has been a surge in medium and small-sized M&A deals has resulted in some firms' M&A teams performing to unprecedented levels. "Last year was the best year ever for our M&A department," says King & Wood Mallesons partner Roberto Pomares. "We've seen many funds raised recently and there have been funds...