Indra admits it is considering a merger and its stock price falls.

BarcelonaThe drums of a merger are beating in the defense sector. Indra is considering the possibility of a merger with one of its main shareholders, Escribano Mechanical & Engineering (EM&E Group). It so happens that one of the co-founders of this family business, Ángel Escribano, is currently the chairman of Indra, in which EM&E Group holds a 14% stake. Indra, which admitted this Friday in a statement to the National Securities Market Commission (CNMV) that talks have taken place, has hired KPMG to analyze the transaction and estimates that EM&E Group's value is between €1 billion and €1.5 billion, as reported by Expansión. On Thursday night, Javier Escribano, chairman of Escribano and brother of Ángel Escribano, stated that "the company Escribano is not for sale, and is worth much more than €1 billion" in statements to The Newspaper.

This news hasn't been received too well in the market. Indra led the small group of companies that suffered losses in the last trading day of the week, dropping 2.32% to €26.940. In the information sent to the CNMV, Indra admits that within the framework of its strategic plan, "it carries out an ongoing process, led by the CEO and in accordance with good corporate governance practices, of analyzing different opportunities with relevant players in the defense sector that add value to the company." It asserts that these include Escribano Mechanical and Engineering, SLU. However, in any case, "today no decision has been taken other than that adopted in the different regions in the market," it states in the same note. The ARA stated that they would not comment on this company.

EM&E has two seats on Indra's board of directors. One belongs to Ángel Escribano and the other to his brother Javier. The latter has taken over as chairman of the family business since SEPI proposed Ángel Escribano to preside over Indra following Marc Murtra's departure to Telefónica. The possible merger between Indra and Escribano would be in line with the most recent moves by European defense giants. Some examples include Airbus, Thales, and Leonardo, which are negotiating a merger of their space businesses, as well as Rheinmetall and Leonardo, which have joined forces to manufacture combat vehicles.