Indra falls with gusto this Thursday in the stock market, where it drops 2%, despite the fact that negotiate with Santa Barbara the creation of a company facing the big land military contracts. The correction of the value occurs despite the fact that analysts value the future joint venture positively. Specifically, Indra is negotiating with Santa Bárbara Sistemas, owned by the European subsidiary of General Dynamics, to create a company to win land military contracts. According to information appearing in various media, the two firms, until now clashed over the award of artillery programs to the temporary joint venture (UTE) between Indra and Escribano Mechanical & Engineering (EM&E), they are studying creating a ‘joint venture’ to join forces for these contracts. The formula being studied would go through give entry to Santa Bárbara in the part of the contracts corresponding to Indra and one of the alternatives would be the creation of a ‘joint venture’ between Indra Land Vehicles and Santa Bárbara. And it is worth remembering that these contracts were previously awarded by the Government, within the framework of the PEM programs, to the UTEs owned by Indra and EM&E. Therefore, everything indicates that the eventual ‘joint venture’ would not alter the ownership of the contracts – which would remain in the awarded UTEs – but would act as industrial vehicle to channel its execution. If it ends up being confirmed, the union of Indra and Santa Bárbara would be a complete surprise, taking into account that the latter appealed to the National Court for the award of the aforementioned artillery programs for a total value of 7,239 million euros. Then Santa Bárbara said that it was nothing more than a «procedural resource,» and stated that it was holding conversations with Indra with the purpose of «uniting the sector, generating synergies and taking advantage of all industrial and technological capabilities existing in Spain.» Precisely what would happen if the joint venture goes ahead. For analysts, the possible union of both companies is good news. «In the absence of knowing the final structure of the potential alliance and the distribution of responsibilities, it would be positive news since it would reinforce Indra’s capabilities in the land defense segment and would give it the opportunity to increase its future order book,» comment the strategists of Banco Sabadell. They believe that, additionally, «this potential agreement could put an end to the judicial dispute opened by Santa Bárbara.» And the Bankinter experts express themselves along the same lines. «We value the news favorably. Mainly because it reinforces the visibility of Indra’s execution capacity in terrestrial programs,» they say. As they point out, «This joint venture would complement recent agreementssuch as the one signed with the South Korean Hanwha, and potential collaborations with Rheinmetall and MAN.» In addition, it would help mitigate «one of the main risks identified in the medium term – industrial capacity – by facilitating access to platforms already developed and accelerating delivery times.» «The main unknown continues to be the shareholding structure of the new company and, in particular, the distribution of control between the parties,» they comment from Bankinter, and it is something that has not yet emerged.
