Spain defense firms pursue scale as Europe rearms

That matters economically because Europe’s defense base remains fragmented and heavily dependent on imports, especially from the U.S., which still supplies about 60% of military hardware bought in Europe. Executives at the Madrid event said the region’s industrial structure — more than 400 Spanish defense firms and only a handful of large prime contractors — is too split up to support the kind of serial production that modern procurement now requires.

The push for size is already reshaping corporate strategy. EM&E said revenue tripled in 2024 to 355 million euros and it added more than 500 workers, underscoring how quickly defense spending is feeding into employment and industrial output. Amper, meanwhile, plans to nearly double its contract backlog to 1.3 billion euros by 2028 from 695 million euros and is targeting three to five acquisitions in Spain, a sign that merger-and-acquisition activity may become a central feature of the sector’s next phase.

For investors, the appeal is twofold: higher defense budgets and the prospect of consolidation. Bigger groups with deeper order books and more manufacturing capacity are better placed to win multiyear programs, while smaller specialists could become targets as larger peers seek scale, supply-chain control and the ability to deliver complex systems faster. That also leaves room for midcaps such as GMV, which employs more than 4,000 people, to become critical partners in large programs even if they are not prime contractors.

The broader backdrop is one of rising geopolitical risk and a European industrial base trying to close the gap with the U.S. and China. Executives argued that the continent cannot replace American capability overnight, but can compete more effectively if governments coordinate purchases and aggregate demand. The next test will be whether rising budgets translate into faster procurement, fewer fragmented programs and a wave of deals that can convert innovation into industrial output.