Indra is committed to paying 100% of the purchase of Escribano with new shares from a capital increase.

Indra intends to execute the acquisition of Escribano Mechanical & Engineering (EM&E) with a capital increase, according to sources familiar with the matter. If both the board and subsequently the shareholders approve the transaction, the company will pay the Escribano family with new shares in the listed company, which means there will be no cash outflow.

With this plan, which is expected to materialize this fall, Ángel (current president of Indra) and Javier Escribano (president of EM&E) will hold more than 20% of the Ibex 35 company, up from almost 15% currently. Currently, Indra has a market capitalization of nearly €7 billion and a share price above €38, 120% more than a year ago. Indra is, by far, the company with the best year-on-year growth in the index.

With this transaction, the Escribano family will align their interests 100% with those of Indra. In other words, they will be staking their entire assets on the bid to turn the technology company into a national defense champion capable of competing head-to-head with major European powers in the major military contracts expected in the coming years. At the last shareholders' meeting, held at the end of June, a forecast was announced that defense procurement would double, reaching €2 billion .

To execute the purchase of Escribano, the company is already taking the first steps. Indra convened a board meeting this Thursday , where it unanimously approved the creation of an ad hoc committee composed solely of independent directors to manage potential conflicts of interest that could arise in any transaction. In practice, the goal is to ensure that the purchase of Escribano is executed with full guarantees that it will benefit all investors. Some of the shareholders who had shown the greatest reluctance believe this decision is impeccable, according to sources familiar with the discussions at the top.

Ángel Escribano did not participate in the deliberations. The chairman of Indra and his brother Javier, a proprietary director of the firm, were excluded from the meeting where the acquisition of his company was discussed. This transaction is being promoted by the CEO, José Vicente de los Mozos. This abstention is governed by good governance rules, since the Escribanos, in addition to being shareholders and directors of Indra, are the owners of the company they intend to acquire, to which the market attributes a value that could exceed €1 billion.

The sources consulted indicate that the Escribano family will not receive a single euro in cash to integrate their company into Indra. Any proposal involving a cash payment would derail the acquisition. To implement the transaction, which involves the delivery of new shares following a capital increase, Indra is already working with KPMG and AZ Capital. The transaction will result in the dilution of all shareholders through the capital increase. The size of the capital increase is not yet final, as it will largely depend on how Indra's stock fluctuates in the coming months, but it could involve the issuance of new shares representing more than 10% of the capital.

The increase in the Escribano shareholding will come after a very strong rise in the stock market, so they will miss out on the stock market rally that is taking place throughout 2025. Since Ángel Escribano became president of Indra at the end of January, the company's shares have gone from around 16 euros per share to nearly 40 euros currently.

Ángel Escribano is the first chairman in Indra's history who is also a significant shareholder. Traditionally, the company has been managed by executives without a significant stake in the company's capital. After the potential acquisition, Escribano and the State Industrial Participation Company (SEPI), which currently holds 28%, could exceed 50% of the capital and exercise control, although there are several shareholders with significant positions and representation on the board, allowing them to continue to exert influence over the direction of the listed company, which is subject to the rules of the National Securities Market Commission (CNMV). After SEPI and Escribano, the next largest shareholders are Sapa, with almost 8%, and Amber Capital (which also holds a stake in the Prisa group, publisher of this newspaper) with just over 7%.

The transaction is part of Indra's growth plan. The company's president himself revealed in the Congress of Deputies that they approached General Dynamics European Landsystems about purchasing Santa Bárbara, but were met with rejection from the American firm. Furthermore, they also intend to acquire the Italian company Iveco Defense, which is in a dispute with several international buyers. Sources familiar with the situation of the Ibex 35 company indicate that they are studying the purchase of other companies. The acquisition of Hispasat and its defense subsidiary Hisdesat was already completed in January. Indra has also expressed its intention to increase Indra's stake in ITP Aero, whose largest shareholder is the American private equity fund Bain Capital.

In parallel, and to expand its defense business, it has just created an armored vehicle division called Indra Land Vehicles. To provide this segment with production capacity, it has purchased the El Tallerón plant in Duro Felguera, and at the last shareholders' meeting, it also established an arms manufacturing subsidiary, Indra Weapon & Ammunition. All the steps, and they have been numerous, over the past year point to a multi-pronged incursion into the field of military spending.

In a turbulent geopolitical context, NATO partners, under pressure from the US, have approved increasing the national defense budget to 5% of their state budgets, which entails allocating a huge amount of resources to defense. Europe's central objective is to increase strategic autonomy vis-à-vis third parties. This is especially due to the fears generated by Russia, which invaded Ukraine three years ago and is still engaged in a war effort. Added to this is the step backward that the US intends to take under the presidency of Donald Trump, historically the military protector of the European Union.

The resignation of Ángeles Santamaría, an independent director of Indra since 2022 and whose term was due to expire in October, was announced at Thursday's board meeting. The former non-executive chairwoman of Iberdrola Spain cited personal reasons for her departure, which was finalized one day before the meeting of the company's decision-making body. Santamaría was appointed an independent director of Mapfre on June 25.