Spain makes the Indra group an arms industry giant – and the price rockets

In Spain, aiming to become multi-taskers in the defense sector Indra– group has been the rocket of the Madrid Stock Exchange this year with a price increase of more than 180 percent, but there are storms at the top of the group.

The most recent topic of uproar is that Indra became the chairman of the board only a year ago Angel Scribe wants to merge his own company with Indra.

His company that manufactures technical innovations Escribano Mechanical and Engineering (EM&E) is the second largest owner of Indra after the government with a 14.3 percent share.

It bought a stake last year, when Angel Escribano’s brother also joined Indra’s board. Owned by brothers EM&E -company alone.

According to information that has become public, they would like to receive shares of Indra worth up to 1.5 billion euros in the merger, although EM&E’s turnover was only 355 million euros in 2024 – and only 115 million euros a year earlier.

The decision on the merger was recently postponed until next year.

Socialists rule

The door has come close to Indra’s board after Sepi, the agency that manages the Spanish state’s company holdings, became Indra’s largest owner in 2022 with a 28 percent share.

In Spain, the state currently means the left-wing government and ultimately the leader of the Socialist Party, the prime minister Pedro Sánchezia.

Sepi’s representatives in Indra’s government are all former socialist politicians.

Last January, Sánchez replaced Escribano as the head of Indra as a matter of announcement and transferred his previous appointment, Mark Murtra, to lead the telephone giant Telefónica, which the state had taken over with a 10 percent ownership stake.

In Spain, the chairman of the company’s board usually has the main responsibility for managing the company, not the CEO.

According to him, Escribano’s mandate at Indra is to make it “Spain’s leading modern arms technology group” with strengths including “drones and robotics, electronic warfare, cyber defense and advanced communication systems”.

The Arms Technology Group is assembled primarily from domestic companies.

The civil side is sold

Indra’s turnover is expected to exceed five billion euros this year and the net result without non-recurring items will rise to around 300 million euros. Indra’s radar systems in particular are sold around the world.

At the end of the third quarter, the order backlog was worth about eight billion euros.

Indra has a lot of information technology for military use – fighter jets, artillery, air defense, individual fighter. However, only a good 20 percent of the turnover comes from purely military technology products.

A large part of the sales are lower-margin IT applications for civilian use. By selling these businesses, we plan to raise hundreds of millions of euros for acquisitions in the defense sector and for growing the arms and ammunition division established within the group.

The European Investment Bank has promised to lend Indra EUR 385 million for the development of defense technology.

In addition, the Sánchez government has allocated nearly 10.5 billion euros to modernization programs for the Spanish armed forces. The amount will increase Spain’s defense spending to the two percent of GDP demanded by NATO – but only on an annual basis, so billions more should be available in the coming years if the level is to be maintained.

Will Bittium receive an order?

What is interesting for Finns is that the government is said to be giving Indra a 768 million euro interest-free separate loan for the modernization of the armed forces’ protected tactical radio communications.

From Oulu Bittium has been in discussions with Indra for several months about a possible participation, as Bittium has technology to offer that cannot be found in Spain.

On the Helsinki stock exchange, Bittium’s price has risen wildly due to various profit expectations.

Telefónica and a Madrid-based telecommunications company Aicox have previously supplied the military with radios using Israel’s Elbit SDR technology, but the government has now banned purchases from Israel due to the events in Gaza.

Last Friday, Indra and Aicox said they had agreed on cooperation, which could mean finding a new supplier of SDR technology.

However, the announcement of the agreement did not mention Bittium or the American company that also offered its own technology General Dynamicsia.

Tensions with the USA

Although Sánchez is inclined to increase defense spending, there are gaps in the US president Donald Trump’s tight to the administration.

The United States recently threatened to block Spanish ships from entering its ports because Spain has decided to stop cargo bound for Israel at its ports.

At the same time, Spain has visibly brought closer its relations with China. Chinese companies are attracted to the country with EU recovery subsidies, which the government still has a lot of unused.

Spain has not given up Huawei’s technology, as the USA and the EU Commission have demanded. Huawei was recently selected by the government as the depository of the Spanish police’s secret wiretapping material.