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Indra expands military technology business amid wars, new threats Business valorinternational.txt
José Vicente de los Mozos,im flames of Indra: civil and military businesses — Foto: Ana Paula Paiva/Valor Spanish group Indra, which this year is expected to post revenue of more than €5 billion with a focus on automation, mobility, telecommunications, and military equipment technologies, is negotiating the acquisition of two companies in Brazil. The goal is to accelerate sales growth, rising from R$1.5 billion this year to R$3 billion by 2028. Globally, the target is to reach €10 billion in three years. The ambitious program is being led by Indra CEO José Vicente de los Mozos, who visited Brazil last week to meet with clients. “I was born in S?o Paulo but moved back to Spain when I was five,” Mr. De los Mozos told Valor. The CEO knows the Brazilian market well. Before joining Indra in May 2023, he spent more than 13 years at automaker Renault and frequently traveled to Brazil. Before that, he worked for four and a half years at Nissan, which later merged with Renault. “We are acquiring in Brazil one air traffic control company and another in defense,” the CEO said. He declined to disclose the names of the companies but noted that talks are at an advanced stage. While acquisitions are not yet finalized, Mr. De los Mozos announced that Brazil, which he called “the hub of the group’s operations in Latin America,” will have new leadership starting Monday (8). Guilherme Solleiro, with 17 years at the group, replaces Marcelo Bernardino, who had held the position since 2021 and will now lead the company’s business across Latin America. Mr. Solleiro’s mission will be to double sales in Brazil within three years, reaching R$3 billion. Most of the group’s revenue, around 60%, comes from Minsait, which provides technologies for digital transformation, automation, energy, toll, and air traffic control. Mr. De los Mozos calls it the “civil business,” which has posted robust growth in recent years. Since last year, however, sales in the defense segment—technologies for border control, as well as equipment such as drones and armored vehicles—have been growing at a faster pace. The wars between Russia and Ukraine and between Israel and Hamas have raised alarms in Europe, where military spending has been expanding. Military expenditures in Europe, including Russia, jumped 17% last year to $693 billion. According to the Stockholm International Peace Research Institute (SIPRI), this was the main driver behind the 9.4% global increase in military spending, which reached $2.7 trillion in 2024, the fastest growth rate since World War II. The aggressive policy of U.S. President Donald Trump has also made the outlook more uncertain. Mr. Trump has spoken of annexing Canada and seizing Greenland, and last week he sent ships and a destroyer to the Caribbean Sea, where they attacked a boat allegedly carrying drugs—11 people were killed. Venezuela responded by sending fighter jets to fly over the destroyer. Mr. Trump then dispatched 10 F-35 jets to the region. Latin America did not follow last year’s strong pace of military spending increases seen elsewhere in the world. Most countries, except Mexico, maintained or cut such expenditures, including Brazil. However, the scenario could change if the United States, the world’s largest military power, decides to escalate operations in the Caribbean or in other parts of the continent. China’s military parade last week also did not go unnoticed. Analysts described it as the largest display of military equipment ever staged by the country. And on Friday (5), Mr. Trump renamed the Department of Defense—it is now called the Department of War. Against this backdrop, Indra’s CEO is betting on expanding the company’s military technology and equipment unit. He is negotiating the acquisition of weapons manufacturer EM&E, the group’s second-largest shareholder, with 14.3% of its capital. The controlling shareholder, with 28%, is Sociedad Estatal de Participaciones Industriales (Sepi), a state-owned entity linked to Spain’s Ministry of Finance. The talks are being structured to avoid conflicts of interest, Mr. De los Mozos said. EM&E is owned by Javier Escribano and his brother ángel Escribano. Javier serves as executive chief and board member. He has been recused from the matter, Mr. De los Mozos said, noting that the negotiations are being supported by Morgan Stanley and Goldman Sachs. JPMorgan is advising EM&E, whose revenue is expected to reach around €450 million this year. The strategy of bringing in a partner to boost Indra’s weight and capital had been under consideration since last year. But the plan to spin off Minsait while keeping the rest of the group listed on the Madrid Stock Exchange has been abandoned. This approach had been advocated by Luis Abril, then CEO of Minsait, who left the company in June. While the EM&E deal is not finalized, Indra continues to make other acquisitions. “We have cash and received €350 million from the European Investment Bank in July,” Mr. De los Mozos said. Recent moves include acquiring control of satellite operator Hispasat, drone manufacturer Aertec, and a factory in Gijón, in northern Spain’s Asturias province, where armored vehicles will be produced. Investors have responded positively. Indra’s shares are up nearly 94% this year, giving the company a market capitalization of €5.7 billion. For Mr. De los Mozos, it is important that the group has production in Spain to supply the European market, reducing dependence on the United States as a defense equipment provider. Could there be consolidation in Europe’s defense sector to create larger groups? Mr. De los Mozos considers it unlikely, since each country seeks to maintain its own arms and defense technology industry. What is happening, he noted, is partnerships among European companies in regional projects. Dassault, Airbus, and Indra, for example, are jointly developing a military aircraft under the Future Combat Air System (FCAS) program. This article was translated from Valor Econ?mico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.
