Mexican Money (Big Money!) Goes Shopping in Spain

Five centuries after Spanish conquistadors took over Mexico, Mexican billionaires are busy buying up chunks of Spain. After four years of recession, it was the perfect match between cash-rich customers and a needy economy.

Mexican billionaire Carlos Slim gobbling up Spanish business
Mexican billionaire Carlos Slim gobbling up Spanish business
Hebe Schmidt


MADRID â€" Clearly the billionaire Carlos Slim had been eyeing investment opportunities in Spain for some time now. And with the recession slowly ending here â€" at least for the rich â€" he is not the only Mexican to have arrived to do some serious shopping.

The world's second richest man, with total assets estimated at around $77 billion, became a principal partner of the Catalan bank La Caixa (now Caixa Bank) back in 2011, after buying almost a million shares. In 2012, he bought 439 buildings belonging to the bank through his real estate firm Inmobiliaria Carso. Other investments include buying up 1.98% of Prisa, the group that owns the Madrid-based daily newspaper El País.

The wave of Mexican investors arriving here is starting to look like a reversal of roles, more than 500 years after Spaniards conquered Mexico. Mexican investors are sinking their pesos both in strategic sectors, and on a scale that is leaving local observers awed.

Antonio Hernández, an energy and international strategy partner at the Spain offices of international consultants KPMG, says Mexico has become the sixth-largest foreign investor in Spain and No. 2 outside of the European Union. A 2013 study estimated accumulated investments valued at almost $21.5 billion.

In 2014, Mexico invested just under $1.2 billion in Spain, which was about 40% of all Latin American investments, and it was already the leading investor in the first half of 2015.

Several factors are helping send Mexican capital into Spain. Firstly, for these investors, Spain is a gateway to the eurozone, says Massimo Cermelli, an economics professor at the Deusto Business School in Madrid.

"Spain is the only Spanish-speaking country in Europe, which makes it a privileged entry point for Mexico," he says.

That was the point for Gruma, a food conglomerate, which last March bought the Fat Taco and Azteca Foods ready-made tortillas and condiments business, run until then by Azteca Foods Europe. It plans to distribute its products in more than 20 European countries, and in the Middle East and North Africa.

The recession in Europe, which was worse in southern Europe, helped attract these investors by knocking prices down to more "attractive" levels. "Let's not forget that right now it is cheaper to set up a business in Spanish cities like Madrid, Barcelona or Valencia, than anywhere else in Europe," says José Carlos Diez, an economist at the Alcalá de Henares University.

Another factor is the saturation of the Mexican market. "We needed to expand abroad to grow," says Roberto Ibarra, head of Turismo y Convenciones, Latin America's biggest events organizers. Last May Ibarra opened the firm's European subsidiary, T&C Europa, in Madrid, from where it will serve clients in Europe, Africa and Asia.

Mexican firms also want to reduce their dependence on the U.S. economy. The United States remains Mexico's top trading partner and export market, and any downturns there inevitably have drastic effects on Mexico.

The right time

Aware of the opportunity, Mexico and Spain have signed a series of working agreements, including the June 2014 "Plan of Action" to boost political dialogue. This was "positive in giving Mexican investments a privileged position in Spain, and the same for Spanish capital in Mexico," says the economist Diez. "Spain becomes a bridge for Mexico, allowing entry into European markets, while Spanish firms established in Mexico would have privileged access to U.S. and Canadian markets" tied to Mexico through NAFTA.

Spain itself is the second eurozone investor in Mexico, with an accumulated portfolio worth more than $51 billion, and 5,495 commercial firms. It is the third worldwide, after the United States and the Netherlands, according to Mexico's Economy ministry.

Deusto University's Cermelli says the Spanish-Mexican Plan has fortified the countries' political ties, which gave a boost to mid-sized Mexican firms. For bigger fish, the Spanish Foreign Minister himself, José Manuel García Margallo, has helped identify potential obstacles to their expansion on the peninsula.

This outward expansion has also coincided with significant falls in direct foreign investment in Mexico and Latin America, in 2014 and 2015.

In which sectors are Mexican firms investing? Finance is a favorite, with new Mexican stockholders injecting vital cash into banks like La Caixa, Sabadell and Popular. Others are food, real estate and heavy industries.

In 2011, Bimbo México bought its namesake brand in Spain from Sara Lee, for a little over $110 million. Last July, it bought a competing brand, Panrico, from the Oaktree fund for $209 million. Bimbo México operates in Spain and Portugal through its subsidiary Bimbo Iberia, which handles over 100 food labels.

Another Mexican firm, Sigma, has completely bought out one of Spain's household meat brands, Campofrío, from a Chinese group, WH. That deal was valued at $354 million. ADO, Mexico's second passenger coach operator, has bought Avanza, the Madrid-based intercity bus firm, for over $880 million.

In 2014, Carlos Slim became the biggest stockholder of FCC, an infrastructures and services group, after buying just over 25% of its shares from the Koplowitz family. He plans to use FCC for projects in Latin America.

Mexican investments in Spain began to increase in 2012 and have continued upward through 2015, says Hernández from KPMG. Thus, while there may be a creeping recession in Latin America and global growth appears lackluster, Mexican capital sees Spain as the new Eldorado.

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How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.

But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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