The Escribano Mechanical and Engineering (EM&E) group is taking a step back and renouncing its merger with Indra, as reported to the National Securities Market Commission (CNMV). The decision of the Escribano family comes after this week the Government made official what was an open secret: its dissatisfaction with the governance of Indra in the midst of the integration process with EM&E. The State Society of Industrial Participations (SEPI), Indra’s main shareholder with 28% of the capital, had already demanded the departure of Escribano from the presidency of Indra before continuing to analyze its merger with EM&E, his family company, understanding that there was a “conflict of interest.”
After this communication from the SEPI, the movement of the Escribano family occurred only a few hours later. “In view of the Relevant Information published by the SEPI on March 18, 2026, at EM&E we consider that the circumstances that allow a potential operation between Indra Group and Escribano Mechanical and Engineering SLU do not currently exist, so EM&E is withdrawing from the operation,” it states in a brief statement.
It must be remembered that the Escribano family maintains control over 14% of the capital of the defense group, where it is the second largest shareholder. In addition, Ángel Escribano holds the position of executive president and Javier Escribano, as proprietary director, representing EM&E. Some positions that, at least for the moment, they maintain.
Some obvious tensions
Following this move, which puts an end to a merger project negotiated for months, Indra assures that “as a consequence of the above, the analysis process of the aforementioned potential operation is considered concluded”, as indicated by the listed company to the CNMV.
Tensions have become evident throughout this week. Late on Wednesday, the SEPI informed the markets supervisor that it had “conveyed to Indra its concern about the influence that the conflict of interest is having on the analysis of said operation, despite the mitigation measures put in place.”
Also, that he had “stated” that “a possible operation with EM&E should not be conceived as an instrument to resolve the conflict of interest, nor should it be influenced by it; on the contrary, this conflict should be cleared up before undertaking the analysis of the operation.” At that time, he did not consider the merger canceled. “SEPI has requested that this conflict be resolved in order to continue the analysis of the operation and adopt a decision on it that is most advantageous for Indra,” the public company chaired by Belén Gualda told the CNMV.
stock market crash
The announcement was made even with the stock market open and Indra’s stock has reacted with a practically immediate drop of more than 16%. Finally, Indra’s stock concluded the session with a drop of 12.28%, leaving each title at 50 euros.
It thus puts an end to an upward climb, fueled by the takeoff of the defense sector. Specifically, in the last year, its shares have accumulated (despite this fall) a rise of more than 86%. Currently, Indra is worth more than 8.8 billion euros on the stock market.
This same Thursday, the President of the Government, Pedro Sánchez, had already announced that the SEPI was working to resolve the situation. “This is an issue that has to do with an alleged problem of conflict of interest and it is SEPI who is working at Indra on this issue,” he indicated in response to the press upon his arrival at the European Council.
Before learning of the end of the negotiations, the president of Indra, as indicated by several sources to elDiario.es, had no intention of leaving the position he holds in the Spanish multinational, considering that he has the support of both the board of directors and the capital of the company. Escribano understands that he has been endorsed in his position by more than 98% of the shareholders’ meeting, which was held last year, and that there are reasons to leave the presidency.
According to the same sources, the manager has the approval of the different investment funds that have a presence in the firm’s shares, such as Amber –controlled by French investor Joseph Oughourlian, main shareholder of the Prisa group–; or Third Point, which already expressed itself in this regard asking that the operation with EM&E go ahead.
Source: www.eldiario.es
