Armada finally crosses that channel

LONDON - Spanish firms are succeeding where the Armada failed four centuries ago: they're invading Britain.

Grupo Ferrovial, Spain's second-biggest builder, yesterday indicated it could make a hostile offer for BAA, the owner of Heathrow and Gatwick airports near London with a market value of £8.1 billion ($20.8 billion).

The deal would take Spanish acquisitions in Britain to more than US$60 billion ($88 billion) in two years.

"We couldn't manage it with the invincible armada, but we'll cross the channel all the same," said Jose Carlos Diez, chief economist at Intermoney, a Madrid-based brokerage.

A London resident can already buy a mortgage and a mobile phone contract from an Iberian company and Ferrovial controls Bristol airport.

Madrid-based Telefonica bought O2, Britain's biggest mobile phone company, for £17.7 billion last year and Santander Central Hispano, Spain's largest bank, acquired Abbey National, Britain's No 5 lender, for £9.4 billion two years ago.

Madrid-based Ferrovial said the bid would be in cash and probably be made with other investors.

It already owns Amey, which has contracts to run Underground services in London.

"This will show the rest of Europe that we aren't just a load of country bumpkins," said Jesus Maestro, an analyst at the Institute of Social and Political Sciences in Barcelona.

"The creation of Spanish multinationals is one of the most important things our democracy has achieved."

Spanish companies are seeking acquisitions abroad after the economy grew an average 3.5 per cent in the past decade, outpacing Britain in four of the past five years.

Such growth makes Spain the third most dynamic economy among euro-zone countries.

Banca Marchin Madrid analyst Ofelia Marin said Britain was attractive because it was one of Europe's least restrictive markets for takeovers. "The market is much more liberal than continental Europe."

- BLOOMBERG