Last week, one of the two candidates with real chances to win the government presidency in Spain, stated “Europe and Latin America are my priorities in foreign policy”. Now, the bitter dispute for the control of Repsol, Spain's biggest energy company, it has raised many doubts of reciprocity in the treatment of corporate investment across the pond.
During the nineties, many spanish corporations took advantage of the privatization of many state companies throughout Latin American, some of the acquisitions resulted to be not very advantegeous. That would be the case of flag airlines in many countries in the region, where Iberia bought them out only to take them out of business few years later.
Telecommunications and banking were other areas where companies from Spain received special treatment, resulting in very lucrative businesses. Worldwide household names like Santander and Telefónica got their break after expanding operations in the Americas, turning them into a cash cows overnight.
It is unfortunate however the lack of reciprocity shown in Spain, in regards of investment made by corporations these time coming from the opposite direction, cashing from a prolongued commodity based boom. Even respected newspapers such as El País of Spain, put pressure in the Sacyr-Pemex (mexican state-run oil company) alliance to control Repsol.
Among the arguments were, the undervalued stock price Pemex paid, presumably in exchange of drilling technology and distribution bargains. After all, low stock prices offer the right opportunity to do business anywhere in the world, although what transpires seems to be related to a bias of being opportunity savvy.
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