M&A transactions in family businesses: distinctive keys
The prominence of family businesses in the mergers and acquisitions (M&A) market is a well-established reality in Spain. In 2023, around 43% of M&A transactions recorded in the country directly involved family-owned companies — a figure that not only reflects the importance of this type of enterprise but also demonstrates a growing trend that appears to be consolidating over time.
This prominence is explained by the fact that these transactions present unique characteristics and challenges that distinguish them significantly from more conventional corporate operations. These differences are not limited to the legal and regulatory sphere but also extend to the interpersonal and emotional dynamics inherent in family ties, which play a decisive role at every stage of the process.
Shareholders’ agreements and family protocols: the legal foundation in M&A transactions
Unlike in strictly corporate companies, in family businesses shareholders’ agreements and family protocols are of special significance. These documents not only formalise the organisation and internal governance of the company but in practice become true guides for action. Among other matters, they regulate:
Corporate governance and management.
Pre-emption rights.
Restrictions on transferability of shares or interests.
Conflict resolution mechanisms.
Succession rules.
Reviewing and, where necessary, adapting these documents before commencing an M&A process is an essential step. Doing so makes it possible to:
Guarantee shareholder stability.
Clearly define the roles and rights of external investors.
Avoid tensions affecting future governance.
Personal and legal challenges in M&A transactions of family businesses
M&A transactions in family companies often involve a higher level of complexity than other operations, as they combine strictly legal issues with personal factors arising from existing family relationships between shareholders.
These ties can generate conflicts or sensitivities absent in traditional corporate deals. Therefore, it is essential to:
Adopt an interdisciplinary approach, including family conflict management and effective communication.
Implement specific dispute resolution mechanisms, such as mediation or specialised arbitration.
Design flexible legal structures to preserve corporate stability, even when personal relationships change.
Keys to successfully managing M&A transactions in family businesses
Advance planning is crucial to minimise risks and seize opportunities. Identifying the need or possibility of a transaction in good time allows businesses to:
Thoroughly prepare legal, tax and family aspects.
Avoid rushed decisions and unexpected disputes.
Rely on clear, updated succession protocols to prevent generational succession problems.
In addition:
Structuring deals with flexibility (e.g. gradual entry of new partners or partial share sales) facilitates continued family control.
Transparent communication and managing expectations appropriately reduce internal resistance.
Comprehensive professional advice — legal, tax and family mediation — is key to success.
At Devesa, we have extensive experience advising family businesses through all phases of their M&A operations, from strategic planning to execution and post-deal follow-up. Our approach safeguards the family legacy and promotes sustainable growth.
If your family business is considering an M&A transaction or needs to prepare a robust succession plan, contact us. We can help you turn these challenges into opportunities for long-term success.
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