Little by little, Spanish companies have been moving into Texas, and they are beginning to enjoy the benefits. In the infrastructure sector, Ferrovial, through its highway subsidiary Cintra, has become a strategic partner with the government in developing the Trans Texas Corridor (TTC-35). OHL, the construction and service company, has acquired two construction firms. BBVA bank has just acquired Compass [Bancshares], whose headquarters are in Alabama, but which has a larger presence in Texas. However, this is only the beginning. Construction firms, engineering companies, road construction companies and banks, among others, have Texas, the paradise of American oil, in their sights. Their goal is not oil wells but infrastructure, and the growing power of America’s Hispanics.Dos puntos fundamentales en esa decisión: la gran presencia hispana en Texas, y el gran potencial de crecimiento del estado (y otros próximos):
Attracted by the growing Hispanic presence, Spanish companies have begun to extend their tentacles throughout the U.S., especially in Texas. Why has that market attracted so much attention among Spanish companies?La entrada en Texas es importante en infraestructuras, aunque no igual en otras áreas:
“In the case of the banks, BBVA is looking at a growing and attractive market,” notes David Allen, professor of strategic management at the Instituto de Empresa. “Many of their potential customers have ties to Latin American markets where Spanish banks already have a presence. In this context, Spanish banks have considerable experience. They have had success offering their services to the same segments of customers in Spain.”
A little more than a decade ago, Latinos represented 27.6% of the population of Texas. In 2025, they are projected to exceed 10 million people, or 37.6% of the population. It’s no accident that Texas, along with California and Arizona, has become the new center of attraction for the Latino population, given the opportunities available for financial institutions, especially those that have an infrastructure on both sides of the border, such as BBVA.
In addition, the American Southwest has become the new economic engine of the United States. Markets in that region are growing at an average rate of one point above the rest of the country. They enjoy lower taxes, a greater supply of jobs and lower housing prices. These factors combine to attract companies – not just foreign companies, but U.S. companies – to the detriment of Northern states.
The Latino population is a magnet for Spanish investors and a possible platform for jumping into neighboring states. In addition, Texas offers other attractions, including its ambitious plan for infrastructure development that offers opportunities to construction firms, road builders, engineering companies, and companies that provide technology, electricity and railroad equipment.Sin embargo, Wharton señala que aún falta mucho para una mayor penetración en el mercado, incluyendo comprensión de su diversidad:
Reflecting this interest, a delegation of big Spanish companies traveled to Texas last February to learn first-hand about the state government’s infrastructure plans, budgeted at $150 billion.
The list of companies that spent tour days analyzing their business options in Texas includes construction and infrastructure companies such as ACS, FCC, Acciona, Ferrovial, OHL, Sacyr Vallehermoso, Azvi and Elsamex; technology firms such as Abengoa, Elecnor, Indra and Soluziona; railroad manufacturer CAF, and Banco Santander. This market has opened its doors more easily thanks to a trade mission led by Jose Maria Aznar, former prime minister of Spain, at the beginning of the year, during which Aznar held meetings with the U.S. Chamber of Commerce.
“The U.S. is an ideal market,” says Mauro Guillén, a Wharton professor and director of the Lauder Institute of Management and International Studies. “The infrastructure is in bad condition; it’s been years since investments have been made in it.” Guillén, who authored a Universia-Knowledge@Wharton article titled, “Ferrovial, Following in the Path of Carlos V,” adds that “central and local governments have a fiscal crisis, which means they are looking for ways to get funding through privatization and concessions that attract private capital. It would not be surprising if Spanish infrastructure companies, which are very competitive, wind up with a piece of the pie.”
(...) This experience, along with its rapid entry into Texas, has enabled Ferrovial to join with the government to develop the Trans Texas Corridor. Ferrovial has been awarded two toll roads in this project -- sections 5 and 6 of SH130, the high-speed highway, as well as, SH-121, barely a month ago. These two concessions alone add up to an investment of $4 billion.
BBVA has invested 7.410 billion euros in its acquisition of Compass. The deal has enabled BBVA to enter the list of top 20 banks in the U.S. However, the sub-prime mortgage crisis is beginning to spread across the country, leading to a higher rate of late payments. Given such conditions, Allen opts for caution.Observación de precaución:
“It remains to be seen if Texas is the springboard for Spanish companies into the entire U.S. market,” says Allen, adding that companies from the entire world “try their luck in the United States. This is all part of becoming a big multinational. In manufacturing sectors, things have gone quite well, but the service sector is another [story]; very few companies have yet to get results. Spanish retail banks are very good at what they do. I believe that they have what it takes to achieve their goals. Unfortunately, they have chosen a tricky time to get in because a growing number of mortgage firms are dealing with late payments.”
Guillén, as well, notes the great diversity of the U.S. market. “In consumer markets, including banking, the United States is a fragmented market, with various cultural standards and levels of buying power. It is a very big country.”
As a result, you cannot assume that the same sorts of opportunities will exist in the rest of the country. One example of the problems facing Spanish companies is Zara. The all-powerful Spanish company has taken decades to acquire a niche in the U.S. Although the company entered other markets quickly, in the U.S. its progress has been slowed by cultural differences from one coast to another, as well as the logistical difficulties involved in fulfilling its goal of re-supplying its shops every 15 days. Although Zara has managed to acquire a niche in the United States, it has done so at a much slower pace than usual.
A similar problem could exist for financial institutions. “Perhaps the most important obstacle involves the integration process for banks that have tried to deal with murky problems they face,” says Allen. “From day to day, BBVA has worked in a positive economic environment in the United States. To the degree that this might change, we will see how well or poorly the bank understands the market.”
Whatever strategy Spanish companies follow in Texas and the rest of the U.S., Allen points out the ultimate factor that can be taken as the moral of the story: “Exceptional companies such as Zara and the larger Spanish banks -- Santander and BBVA -- will succeed in practically every market. My major worry is that [Spanish companies] may wind up buying businesses that are overvalued or have hidden problems.” Regarding BBVA’s recent purchase of Compass, he says, “The current challenge for BBVA in the U.S. is the emerging loan crisis, especially among mortgage firms. If BBVA is a winner despite such conditions, it could become a serious player within the U.S. market.”