Spanish defence champion accuses General Dynamics of ‘destroying’ arms maker in battle for control

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Spain’s aspiring defence champion Indra has triggered a transatlantic war of words by declaring it wants to acquire a Madrid-based arms manufacturer owned by General Dynamics, the US defence giant.

Indra, which counts the Spanish state as its largest shareholder, has taken the unusual step of going public with its desire to purchase Santa Bárbara Sistemas, which makes armoured vehicles, while simultaneously attacking General Dynamics’ management of the business.

Its move comes as Europe scrambles to re-arm itself in response to President Donald Trump’s demands that the region shoulder the burden of defending itself rather than relying on America.

Ángel Escribano, Indra’s executive chair, told Spanish lawmakers that Santa Bárbara’s armoured vehicle technology — the group’s jewel — was “property of the Spanish people” and belonged in their hands.

Asked if Indra, known mainly for its radars as well as tools for electronic warfare, was ready to purchase a Santa Bárbara factory, he said “of course” in an interview with the Nueva España newspaper. “I think Indra would be the right company to drive that whole industry.”

Escribano also criticised General Dynamics’ ownership of Santa Bárbara. “There has been no investment. It has not grown. Rather it has destroyed almost all the industrial fabric that Santa Bárbara, a once great company, had in its day,” he said.

General Dynamics, one of the world’s largest defence groups, owns 100 per cent of Santa Bárbara and has rebuffed Indra’s blunt overtures, signalling it remained committed to the business.

The US contractor also hit back at recent criticisms, saying comments made about its European arm and Santa Bárbara were “misguided and misinformed”, though it did not specify which ones it was referring to.

It said it had made “significant and consistent investments in [Santa Bárbara] and the broader Spanish defence industry,” including nearly €500mn of investment in capital expenditure, export programmes and R&D since 2010.

The Spanish government is Santa Bárbara’s single biggest customer but GD said that under its ownership the business now exported 60 per cent of its products to international customers.

Europe’s governments are under pressure to build-up national defence champions as part of a move to boost resilience in the face of uncertainty over America’s traditional defence role in the region. The war in Ukraine has also turbocharged the fortunes of some national champions, notably German tank and ammunition maker Rheinmetall.

Santa Bárbara, whose factories include one that originated in the 16th century, was state-owned until 2001, when it was sold to General Dynamics for €5mn at the end of a privatisation process.

But Escribano argued that Spanish taxpayers had paid for the development of Santa Bárbara’s technology, which was ultimately purchased by the Spanish military. “That technology belongs to the Spanish people . . . and I think it makes perfect sense for it to be back in our hands,” he told a parliamentary hearing last week.

Indra is valued at €5bn and the Spanish state owns 28 per cent of the company. As the country’s largest defence contractor, Pedro Sánchez’s Socialist-led government wants to turn it into a European champion.

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The Spanish state’s Indra stake is one of the largest in any listed company in percentage terms, and Sánchez has called for Spanish industry to “be at the vanguard in Europe and the world” on defence and security.

Under Escribano, who became executive chair in January when the government moved his predecessor Marc Murtra to Telefónica, Indra has struck a deal to take control of Spanish satellite operator Hispasat, agreeing last month to pay €725mn for a 90 per cent stake.

The Spanish government has also made Indra its co-ordinator for the Future Combat Air System, Europe’s flagship project to build a new fighter jet.

General Dynamics said it was “committed to serving the government of Spain and we believe this is best achieved through a company that brings access to international capital, markets and technology”.

The Spanish government declined to comment.

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