Santiago Escribano and Javier Escribano, chairs of Indra and EM&E, face scrutiny over overlapping roles. Spain’s state holding firm Sepi demanded resolution of their conflicts of interest before approving a proposed merger involving defense giant Indra and weapons maker EM&E.

Third Point, the hedge fund led by Dan Loeb, acquired a stake in Indra and pushed for the €9.7bn company to swiftly acquire EM&E, citing strategic alignment. However, Sepi rejected the idea of using the deal to address conflicts, stating: “The conflict should be resolved before proceeding.” Shares in Indra fell 4%, reflecting market unease.

While Loeb emphasized the merger’s value creation potential, Sepi insisted on independence from the Escribano brothers’ influence. Both brothers have recused themselves from related discussions, but Indra CEO José Vicente de los Mozos continues advocating for the deal. EM&E’s tank weapon systems and €488mn annual sales add manufacturing capabilities to tech-focused Indra.

The impasse highlights tensions between Loeb’s Third Point and Spain’s political establishment. With Ukraine war and Trump administration defense spending pressures, resolving the conflict swiftly could position Indra as a European defense leader. Shareholders and regulators await clarity on whether Ángel Escribano will retain his Indra chair role, approved in January 2025.