Ángel Escribano, former chairman of Spanish defense company Indra, is reportedly planning an initial public offering (IPO) for his family-owned defense firm, Escribano Mechanical & Engineering (EM&E). This move comes after Escribano's controversial exit from Indra, where the Spanish government, through its state-owned fund SEPI (which holds a 28% stake in Indra), raised conflict of interest concerns over a proposed merger between Indra and EM&E.
The potential merger between Indra and EM&E, valued at approximately $1.5 billion according to consultancy reports commissioned by Indra, was a significant point of contention. EM&E, co-founded by Ángel Escribano and his brother Javier, also held a 14.3% stake in Indra, making it the second-largest shareholder behind SEPI. The Spanish government ultimately opposed the merger due to the conflict of interest, leading to Escribano's departure from Indra and the subsequent withdrawal of EM&E from the acquisition talks. Indra's shares fell as much as 19% after the news, ending the day 12.3% lower.
Indra, a company with defense, IT, and air-traffic control operations, has been seeking to consolidate its position in the Spanish defense sector, with defense contracts accounting for 12% of its revenue. The Spanish government has since proposed restructuring Indra's defense assets into a new subsidiary to facilitate consolidation while maintaining state control over the parent company. Ángel Escribano has been replaced at Indra by Àngel Simón, who will serve as non-executive chairman, a change aimed at restoring governance separating executive and non-executive powers.
