Spain's state-owned SEPI has expressed concern to Indra over the conflict of interest in acquiring Escribano Mechanical & Engineering (EM&E), owned by president Ángel Escribano, whose brother Javier leads it and sits on Indra's board. SEPI demands the conflict be resolved before proceeding with the analysis. The announcement follows rumors that caused a 4.19% stock drop on Tuesday.
SEPI, Indra's largest shareholder with 28% of capital, notified the CNMV on Wednesday of its discontent with the deal announced in April 2025. In December, Indra's board unanimously approved the integration as 'coherent' amid Europe's defense boom. The merger would give Indra industrial capacity for 7.24 billion euro government contracts, including heavy artillery, plus 3.002 billion in 0% loans from Industry Ministry, challenged by Santa Bárbara (General Dynamics) before the Supreme Court and administratively. Awards favored Spanish capital despite current capacity gaps. 'SEPI has conveyed to Indra its concern over the influence the conflict of interest is having on the analysis of the operation, despite mitigation measures,' the document states. It adds the 'conflict of interest should be cleared before undertaking the analysis [...] to make the most advantageous decision for Indra.' Government sources see it as an ultimatum: Escribano must step down as president or SEPI rejects the merger. SEPI has Sapa's support (7.94%), but Amber Capital (5%), PRISA shareholder, opposes his removal. Third Point warns of stock erosion if halted: 'We write to express our firm support for the proposed transaction with EM&E.' Indra's board meets March 25, shares down 0.2% Wednesday.
