Indra, the Spanish technology and defense company, has established a protocol to navigate potential conflicts of interest surrounding a possible integration with Escribano Mechanical & Engineering (EM&E), a family-owned defense firm. The move, approved by Indra’s board on July 30, 2025, and publicly disclosed this Friday, , follows scrutiny of the relationship between Indra’s chairman, Ángel Escribano, and the privately held EM&E, where he holds a significant ownership stake alongside his brother, Javier Escribano.
The protocol, mandated by the Spanish National Securities Market Commission (CNMV), aims to ensure the process adheres to the “highest governance standards” and manages the inherent conflicts arising from the dual roles of Ángel Escribano. Crucially, the decision on whether to proceed with the integration will rest with Indra’s Chief Executive Officer, José Vicente de los Mozos, effectively excluding the chairman from direct involvement in the transaction’s execution. The Escribano family will also be excluded from the decision-making process.
EM&E is currently Indra’s second-largest shareholder, holding a 14.3% stake, trailing only the Spanish government’s 28% ownership through the Sociedad Estatal de Participaciones Industriales (SEPI). Javier Escribano also serves on Indra’s board of directors representing EM&E’s interests, further highlighting the complexity of the situation. The protocol dictates that both Ángel and Javier Escribano must recuse themselves from any board meetings discussing the potential merger, refrain from voting on related matters, and be denied access to relevant documentation, and advisors.
To oversee the potential transaction, Indra has formed an Ad Hoc Committee, comprised of independent board members: Belén Amatriain (chair), Eva María Fernández, Josep Oriol Piña, and Bernardo Villazán. This committee will coordinate and supervise the entire process, providing reports and recommendations to the board before any decisions are made. While the committee’s input is considered necessary, the protocol explicitly states that its recommendations are not binding, granting the final authority to CEO de los Mozos and the full board.
The protocol outlines that de los Mozos will “endeavor, as far as possible,” to secure a favorable report from the Ad Hoc Committee before seeking board approval. However, should a favorable report not be forthcoming, de los Mozos is instructed to present the terms of the operation to the board in a manner he deems most beneficial to Indra’s interests. This provision underscores the board’s ultimate control, even in the face of committee reservations.
A key element of the process involves a shareholder vote. Indra intends to convene a general shareholders’ meeting, presided over by the company’s vice president, to seek approval for the integration. EM&E, as a significant shareholder, will participate in the vote. The required quorum and majority will depend on the specifics of the transaction, potentially requiring a simple majority, an absolute majority, or a two-thirds majority depending on whether new shares are issued.
The potential integration of EM&E represents a strategic move for Indra, allowing it to expand its presence in the defense sector, particularly in the realm of weaponry. Indra has already established a “Weapons & Ammunitions” division, signaling its intent to grow in this area. EM&E specializes in the development of armaments, including turrets for tanks and armored vehicles, and is a key player in major Spanish defense contracts. The company is part of Tess Defence, a consortium alongside Indra, Sapa Placencia, and Santa Bárbara Sistemas, which secured contracts worth approximately €2 billion each for the production of the 8×8 Dragón and the Vehicle de Apoyo Cadenas (VAC) for the Spanish Army.
The situation highlights the challenges faced by publicly traded companies with significant family ownership and potential conflicts of interest. Indra’s proactive approach, guided by regulatory pressure and a commitment to corporate governance, aims to mitigate these risks and ensure a transparent and equitable process. The outcome of the potential integration remains uncertain, but the established protocol provides a framework for navigating the complexities and protecting the interests of all stakeholders, including minority shareholders.
The approval of this protocol by the board demonstrates a willingness to address concerns raised by the CNMV and maintain investor confidence. The emphasis on independent oversight, through the Ad Hoc Committee and the CEO’s ultimate decision-making authority, is intended to reassure the market that the integration, if it proceeds, will be conducted fairly and in the best interests of Indra and its shareholders.
