Business Sustainability and Business Continuity: An M&A Reading in Key of Sustainability (Esade Law Review De lege ferenda)

Summary

• Every year in Europe, approximately 450,000 business transfers take place, with around 150,000 facing the risk of not being completed successfully.p.3
• Small and medium-sized enterprises (SMEs) represent 99.8% of the business sector in Spain and generate 66% of employment.p.3
• Insolvency procedures show high rates of business dissolution in Spain, where 96.2% of bankruptcy proceedings in 2023 ended in liquidation.p.4
• Spain has become a major hub for succession-oriented investment vehicles, concentrating around 40% of search funds in Europe.p.6
• Digital M&A marketplaces like Deale have listed more than 3,000 companies for sale to facilitate SME ownership succession.p.8
• Technology-driven transaction platforms aim to streamline business transfers, closing deals within an average timeframe of 120 days.p.9

Key insights

1. Business sustainability must be defined by long-term operational viability and value creation rather than strictly ESG compliance reporting.p.2
2. Traditional Spanish insolvency proceedings fail as restructuring tools, with 96.2% ending in liquidation during 2023.p.4
3. Mergers and acquisitions can serve as a structural mechanism to preserve viable businesses threatened by financial distress or succession gaps.p.5
4. Spain accounts for roughly 40% of search funds in Europe, reflecting growing professionalization in SME succession.p.6
5. Earn-out clauses align incentives by conditioning a portion of the purchase price on meeting future financial targets.p.7
6. Digital M&A marketplaces expand the pool of prospective buyers for regional SMEs beyond local competitors.p.8
7. Algorithmic matching and digital deal rooms allow platforms to target an average deal completion time of 120 days.p.9
8. European regulation progressively incentivizes long-term investor engagement that supports structural business preservation.p.11