M&A Report 2023: Portugal
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M&A Report 2023: Portugal

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Nelson Raposo Bernardo and Joana Andrade Correia, Raposo Bernardo & Associados

In 2022 the Portuguese M&A market experienced a downturn compared to 2021. The next months may present some developments regarding the re-privatisation of TAP Air Portugal. In fact, the finance minister has already stated that the preliminary phases of that process have already started. 

The privatisation of Efacec – one of the main Portuguese companies in the energy, mobility and environment sectors, among others – is still on the table after being relaunched at the end of 2022. 

The real estate sector is still the most active sector, although some actors in the market foresee the energy sector increasing in activity soon. 

Spain is still the main M&A partner of Portugal. Spanish investors are the most active in Portugal and Spanish companies are the usually the targets of Portuguese investors. In the inbound market, French investors are quite attracted by the Portuguese market. Meanwhile, foreign private equity and venture capital funds have increased their activities in Portugal during 2022. 

Portuguese M&A market

The Portuguese M&A market is mainly driven by private M&A transactions, considering the relatively small size of the Portuguese capital market. 

Nevertheless, and because of the market’s relatively small size, any public transaction can have a significant impact, especially when involving companies in key sectors such as financial services, banking or distribution. 

Local sources, like the Transactional Track Record (TTR) report for 2022, list the acquisition by Davidson Kempner of two funds as the transaction of the year. The funds owned several luxury hotels and other tourism related assets. The reported valued of the transaction was €850 million (approximately $900m). 

The acquisition of an 8.71% share in Banco CTT by Italian insurance group Generali, or the ongoing acquisition, both in Portugal and abroad, of projects and plants by Greenvolt (the Portuguese newcomer to the renewable energies sector) are also noteworthy. 

In terms of M&A deal volume, compared to 2021, 2022 was a deceiving year. According to TTR, the number of transactions decreased by 8% and in value by 39%. These poor results were undoubtedly influenced by the turmoil caused by the war in Europe and by increasing inflation. 

Future outlook

Portugal has showed some resilience in the current economic climate. The country’s main indicators have evolved positively, in some cases better than forecasted. 

The country is still gaining recognition as a safe holiday destination for tourists from all around the world and local companies and products are also gaining international awareness. 

Portugal is now implementing the so-called ‘recovery and resilience plan’ (RRP), a national program, with an implementation period lasting until 2026. The RRP envisages implementing a set of reforms and investments aimed at restoring sustained economic growth and supporting the goal of convergence with Europe over the next decade. 

As stated, the re-privatisation of TAP and Efacec are also in the horizon. Major projects such as the new Lisbon airport or the reform of the railway network, may also have an impact on the M&A markets in the years to come. 

Portuguese companies are also seeking opportunities abroad, namely those acting in sectors such as renewable energies, paper or technology. 

Deal trends

The main factors influencing deals have been:

  • The need to increase market share and gain an international presence;

  • The need to restructure the finances of the targeted companies; and

  • The good opportunities the target represented.

The acquisition of distressed assets has been also an important driver for the market in the last few years, particularly in the real estate sector. 

This can include trends related to:

  • Industry consolidation, M&A-driven growth, financing considerations or other factors;

  • Distressed M&A work such as takeover reorganisations, bidding and post-M&A closings; and

  • The impact of COVID on M&A-related disputes, and the use of indemnity provisions. 

Investor impact

Financial investors such as private equity and funds are consistently active in the Portuguese M&A environment. 

Portugal is seen as a stable and regulated market, an EU member country, open to foreign markets and friendly to foreign investors, where most of its youngsters have good proficiency in English. 

All this, in addition to the existing good opportunities from a strictly business perspective, is drawing the attention of long-term investors to the Portuguese M&A market. 


In 2022 there were no main regulatory changes or any other changes with significant impact on M&A transactions or activity. 

The changes that have occurred (some of them regarding the persons leading the regulatory bodies) were not influenced by the economic impact of COVID. 

The new Banking Activity Code is still under analysis by the government. This code, aimed at regulating banking activity, will revoke the Regime Geral das Instituições de Crédito e Sociedades Financeiras. The change may have some impact on operations involving financial entities. 

At this moment there are not any other rules, pieces of legislation or policy frameworks under discussion that may impact M&A in the Portuguese jurisdiction in the near future. 

However, the legislative process is very dynamic and amendments to laws and regulations can arrive at any given moment. Therefore, local legal advice is mandatory and can make the difference in the success of M&A transactions. 


The main effect still lingering from COVID relates to force majeure situations and clauses. These are still subject to deep scrutiny by all parties of a transaction. 

ESG concerns are, as already predicted last year, even more relevant each year that goes by. ESG good practice allows sellers to increase the value of their companies and assets and reduce the risks buyers are going to take. 

ESG-related assessments are essential in the due diligence phase, and the clauses addressing ESG situations are mandatory in M&A transactions. 

Considering that local practices and rules may vary, it is advisable to seek local advice regarding ESG-related matters. 

Common misconceptions

A common misconception about M&A transactions in Portugal is based on the fact that they follow international common standards. This is obviously true but could lead businesses to believe that local advice is not required, and that it can be easily replaced by the answer to a few specific questions. This is not so true. 

The belief that the procedures of other jurisdictions are the same as those applicable in Portugal can lead to enormous mistakes with serious negative impacts on the transaction. 

Seeking local advice, which is mindful of the local legal and regulatory processes, can make all the difference and avoid a host of unwanted obstacles and delays. 

Questions most asked by clients depends on many factors, of which the most relevant is the sector in which the target operates. The stage of the transaction or the knowledge the buyer has of the sector and the target can also deeply affect the type of questions that are asked. 

Nevertheless, the more important questions usually address issues such as corporate and corporate compliance-related matters, licensing rules, competition, tax and regulatory aspects. 


Technology has a dual role in the M&A deal-making process. 

Firstly, it can be a tool. These tools are playing an increasingly important role in different phases of the process. It is no longer conceivable that a transaction can be concluded without resorting to technology. From data analysis to simpler tools such as electronic signatures, technology is everywhere in the deal-making process. During an M&A process, it is not uncommon for a company to be exposed to higher risks because large amounts of sensitive information is shared with counterparties that may not adopt the same levels of security. Apart from preparing for external threats, companies may also internally control which information is to be disclosed during a negotiation process. 

On the other hand, the technology aspects of the targets, for example information and data security, are increasingly important. Companies are more aware of it and have been acting accordingly.

Public M&A procedures

The Securities Code and regulation issued by the Portuguese Securities Market Commission (CMVM) provide the applicable rules for obtaining control of a public company. These rules define the structure, content, and procedure to formalise a public offer. Public offers require information to be issued in a standardised way and are subject to registration with the CMVM.

The documents containing the offer’s mandatory information are called the prospectus (prospecto) and offer announcement (anúncio de lançamento) and are available on the CMVM website. When preparing public offers and drafting these documents, the intervention of a financial intermediary is mandatory. 

The prospectus and the offer announcement are the official documents that enshrine all the information necessary for the investors to take an informed and well-grounded decision. The organisation of the information in these documents is subject to models and templates, to allow for an easy comparison with different offers, between several types of securities and between different companies. 

The prospectus and the offer announcement shall mandatorily include information on: 

  • The offeror;

  • The type of offer;

  • The capacity in which the financial intermediaries intervene;

  • The price and global amount of the offer or the range between the maximum and minimum price, the nature and other terms of payment;

  • The offer period;

  • The allotment criteria;

  • The conditions to which the offer is subject;

  • The places where the prospectus is published and made available; and

  • The clearing entity.

The conditions most often attached to public takeovers are:

  • The approval by regulators, such as the competition authorities or sectoral regulators, including the telecommunications authority (when required); and

  • The acquisition of a certain threshold of shares.

In some offers there are conditions regarding the approval of certain governance documents or amendments to some governance documents by the shareholders. 

COVID has not changed these conditions and there was no recent legislation in this respect. 

Additionally, there is no common practice for break-up fees in the Portuguese public M&A market. 

Locked box

In recent years it has become more common to see different consideration mechanisms in M&A transactions. Fixed price (locked-box mechanism) or adjusted price (depending on the company’s performance — earn-out — or based in completion accounts) mechanisms are adopted considering the characteristics of the different price adjustment models; some are usually seen as pro-buyer while fixed price models are usually favoured by sellers. 

Likewise, one can observe an increasing activity in the M&A related insurance sector. This has become a trend in recent years and can be found not only in M&A transactions but also in assets deals, especially in real estate.

It is very difficult to determine what type of conditions are more commonly attached to a private takeover offer because they depend on the particulars of each transaction. 

What appears in a written sale and purchase agreement depends on the specifics of the transaction and on what has been agreed between the parties. 

Most M&A transactions involving Portuguese companies are subject to Portuguese law and jurisdiction, despite parties being able to subject the documents to foreign law (common when there are foreign investors involved). 

It is also common that disputes are subject to international arbitration.

Exit environment

In 2022, the market for IPOs was virtually non-existent in Portugal. There were some public subscription offers of securities, but no IPOs. 

According to the latest CMVM monthly report, the secondary market in January 2023 reached €2.89 billion, a €641,9 million (28.5%) increase over December 2022 and a €390.7 million (15.6%) increase over January 2022.

The Euronext Lisbon market cap was €220.955 billion, representing an increase of 2.2% on a monthly basis and a 2.9% increase year-on-year. 

Looking ahead

Portugal is an open market, subject to the influences of current international circumstances. Therefore, the prospects for M&A in this country also reflect the main global trends. 

In Portugal, good opportunities came at a more interesting value when compared to more mature markets. This was more pronounced in sectors such as real estate, tourism, renewable energy and technology, sectors in which the talent of younger and more qualified generations is recognised and highly valued. 

The aforementioned RRP could also have some positive impact in the M&A market. 

Considering the global forecast for an increase in M&A activity for the second half of 2023, it is possible to expect that the market will make positive progress this year. 

Legal advisors will have an important role in this recovery, which will probably involve smaller deals, conducted in a more careful manner and at a slower pace to avoid unnecessary risks.

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