Ferrovial shareholders give thumbs up to Dutch shift

Madrid — A majority of Ferrovial shareholders on Thursday approved a plan to move the Spanish construction group’s holding company to the Netherlands, paving the way to a listing in the US and potential access to green subsidies there.

The majority approval was announced during a webcast from Ferrovial’s AGM that showed the vote taking place, but a detailed outcome is due later in the day.

Ferrovial has said it has only €500m available to pay shareholders who do not want to stay invested, so a “no” vote by holders of as little as a combined 2.6% of the capital could complicate or even scupper the move.

They have a month to decide whether to sell their shares.

Spain's government has been angered by Ferrovial's plan and officials have warned that the Spanish tax agency will closely scrutinise the move by the builder of highways, airports and metro lines if it is approved.

But chair Rafael del Pino, Ferrovial’s largest shareholder with a 20.44% stake, told the AGM that “taxes to be paid by Ferrovial after the transaction will be very similar to what it is paying” and that “Ferrovial is not leaving Spain”.

Spain’s current corporate tax rate is 25% versus 25.8% in the Netherlands, which had until recently attracted a high proportion of multinationals due to its favourable tax rules.

Since Britain’s exit from the EU, the Netherlands has increasingly relied on factors other than tax to attract businesses, such as ease of stock market listings and international cross listings, including with the US.

‘Excessive attacks’

The Spanish government fears more firms could follow suit and argues that a full US listing is perfectly possible for a Spain-based company, although there are no such precedents.

World Federation of Investors president Jean-Pierre Paelinck told the AGM he considered “the attacks by the Spanish authorities on the merger project to be excessive and bordering on illegal”, arguing that Ferrovial was exercising its right to freedom of establishment in the EU.

Spain’s government said in a statement it “respects the decision taken by shareholders” and will “continue to work in a constructive manner with Spanish companies to defend their interests and promote their expansion and growth”.

In an earlier letter, Ferrovial CEO Ignacio Madridejos cited “technical and operational” concerns over listing a Spanish company directly in the US.

Ferrovial’s board said the proposed move was an “expeditious” way to apply for the US listing, increasing liquidity and access to financing.

With a market capitalisation of €19.4bn, Ferrovial holding company FISE would rank about 13th in the Amsterdam index, where it would initially be dual-listed along with Madrid.

Inflation Reduction Act

Sources familiar with the matter said potential access to US government funding for energy transition and other subsidies under the Biden administration’s Inflation Reduction Act (IRA) had influenced its decision.

Ferrovial also wants to approach institutional funds in the US willing to buy stakes if it gets a listing there.

With 82% of its revenues coming from abroad, mainly in North America, Ferrovial even evaluated moving its holding company to Texas, but ultimately chose Europe and keeping its roots in Spain, one of the people with knowledge of the discussions said.

Under the plan, about 30 Ferrovial employees will move to the Netherlands to join the 12 currently working for its subsidiary, where the company’s global decisions will be taken.

Dutch regulatory and legal systems are regarded as reliable, tending to favour a company’s management over shareholders, and are often available in English.

Among blue chip companies, Shell and Unilever have left the Netherlands for London to avoid a Dutch dividend tax, but both maintained AEX listings.

Record label Universal Music is headquartered and listed in the Netherlands due in part to a favourable royalty regime, although most of its operations are in Los Angeles.

Reuters