What's happening at the defense company Indra?

MadridFor days now, the defense company Indra, in which the Spanish State holds a 28% stake through its investment arm, SEPI, has been overshadowing the press headlines, as well as its stock market losses: in the last five days, its shares have fallen by more than 11%. The underlying reason is a business deal that has been controversial since it was first proposed: the acquisition of the Spanish defense company Escribano Mechanical & Engineering (EM&E Group). This is a company co-founded by Indra's current chairman, Ángel Escribano, and currently chaired by his brother, Javier Escribano. Both are also owners. Furthermore, EM&E Group is Indra's second-largest shareholder, after the State, with 14.3% of the share capital.

The senior Indra executive has always defended the deal, which was confirmed in April 2025, when the company announced that discussions were underway to analyze the acquisition and estimate the value of EM&E Group. However, since then, the idea of ​​a potential conflict of interest has not gone unnoticed. In fact, some members of the board of directors raised this concern in late 2025. Specifically, directors Olga San Jacinto and Coloma Armero. Criticisms were expressed, as explained by the ARAThat obstacle was resolved by agreeing to have the complete 2025 financial statements of both companies and their audits on the table before taking any steps. It was also agreed that José Vicente de los Mozos, the CEO, would be solely responsible for managing everything surrounding the operation. He himself confirmed this Monday that he has received the board's approval to negotiate with Javier Escribano, president of EM&E Group, and to "study different structures for the operation." And it is in this nuance of the "different" possibilities for the operation to go ahead that the Spanish government and the commotion of the last few hours come into play.

The specter of conflict of interest

Initially, everything pointed to Indra and Escribano consolidating into a single group through a merger by absorption, but the Moncloa Palace reportedly expressed reservations due to the specter of a conflict of interest. There was also concern about losing power in a company the government considers strategic—it relies primarily on contracts from the Ministry of Defense—especially at a time when public defense spending has skyrocketed. The Spanish government has simply expressed caution. "The government's presence as a shareholder [in Indra] has the objective of long-term stability and also of strengthening the general interest," government sources indicate, adding that "any decision must be made by the company's board of directors." Some reports have indicated that the disagreement over how this operation should be carried out has led to a direct clash with Ángel Escribano, who was reportedly offered his resignation, although he has denied this. "I want to be clear, no one has asked for my resignation and there is no open process regarding this matter," the executive stated on Thursday in a press release to the agency. BloombergUp to two sources familiar with the process confirm to ARA that this scenario has not been considered.

Does all this mean that the deal with the Escribano family has fallen through? No. In fact, the company itself issued a statement to the National Securities Market Commission (CNMV) this Thursday confirming that the analysis of the deal is ongoing. However, what is cooling down, and at times at that, is the possibility of a merger. Sources at SEPI consulted by ARA confirm that, while the CEO was authorized to negotiate "different alternatives" for a deal with the Escribano group, some would be supported "but others would not," the same sources assure. For SEPI, that is, for the Spanish government, it is crucial to safeguard the public interest and consider how the deal might affect the company's governance if it is carried out in one way or another. In this regard, apart from a merger, the acquisition of part of Escribano is being considered, for example. In any case, the decision will be made when everything reaches the board of directors' table, SEPI sources confirm.