MADRID/MEXICO CITY (Reuters) - As Spain's economy begins to recover from a near-fatal crisis, Latin American companies and entrepreneurs are ahead of the pack in gaining a foothold from which they can grab a share of the spoils.
Mexicans, Venezuelans and others have moved into areas such as banking, travel, food and other consumer-orientated sectors.
Investors from Spain's former colonies are also snapping up financially strained firms in "the Mother County" in need of liquidity boosts.
In recent surprise deals, Venezuelan bank Banesco won a bid for state-rescued lender NCG Banco CAJAFN.UL with an offer of 1 billion euros. Peru-based Grupo Santo Domingo pledged 100 million euros as part of a wider capital injection in Spanish property firm Colonial (COL.MC).
"It's a logical phenomenon," said Enrique Quemada, head of Madrid-based M&A adviser ONEtoONE Capital Partners.
"It's now clear that Spain isn't leaving the euro and the euro isn't falling apart, so with opportunities at a good price and a common language, it's the natural gateway for large Latin American groups to enter Europe," said Quemada, who has opened offices in Mexico, Colombia and Peru to tap investor interest.
The trend is a reversal of the investment tide in the 1990s which saw Spanish businesses pour money into Latin America.
Newly privatized Spanish firms scooped up Latin American banks, telephone companies and utilities, drawing sometimes-unfavorable comparisons to their armor-clad Conquistador ancestors 500 years earlier.
But a property crash in Spain in 2008 contributed to a long economic and debt crisis during which buyers shunned Spain, fearing it would follow neighbors Portugal and Greece into an international bailout and contribute to the death of the euro.
With such fears now a distant memory, foreign money is flowing back in, particularly from the pockets of wealthy Latin Americans keen to take advantage of the recovery and use Spain as a stepping stone for further investment in Europe.
The recession created a wave of corporate bankruptcies and left one in four workers unemployed, and investment from abroad is key to securing a recovery and jobs growth in 2014.
Even though Spain's blue chip index .IBEX is trading at 2 and 1/2 year highs, bankers said Spanish companies still offer attractive multiples versus their European peers.
"It's just got to attract foreign investors. And this is the moment, the moment of inflection as prices for assets are low and the economy is giving signs of picking up," BBVA economist Rafael Domenech said.
Colonial, for example, is trading at a 14 percent discount to net asset value versus an about 4 percent discount for European peers, implying potential deals in the real estate market.
Big investments from prominent billionaires George Soros and Microsoft founder Bill Gates in debt-laden builder FCC (FCC.MC) have helped boost confidence in Spanish assets, which have also seen interest from Chinese and sovereign wealth investors.
But the bulk of M&A deals have come from Latin America.
The "Reconquista" has coincided with a rise in wealth in Latin America and particularly in Mexico, which has led to the string of Spanish acquisitions ranging from bank and food assets to buses and shipbuilding.
Over the past six months, Mexican investors have taken stakes in banks Popular POP.MC and Sabadell (SABE.MC), meats processor Campofrio CPF.MC, shipbuilder Barreras and transportation company Avanza.
Spanish media say Mexican businessman Miguel Valladares is likely to come to the rescue of entertainment firm Zinkia, producer of the internationally-known cartoon Pocoyo, which recently filed for insolvency.
They also predict a deeper partnership between billionaire Carlos Slim and lender La Caixa, which along with other Spanish savings banks is considering the sale of vast corporate stake holdings to meet stricter European capital rules.
Slim still heads the list of Mexican billionaires, 13 of whom figured in the top 1,000 of Forbes Magazine's annual rich list at the start of 2013, with a total net worth of almost $146 billion.
By comparison, there were 11 Spaniards with assets valued at nearly $90 billion.
Mexican Economy Minister Ildefonso Guajardo said the financial crisis had created opportunities for investors in Europe at a time when Mexican companies were already looking to expand their reach into the rest of the world.
"Before, we only looked at attracting investment. Today Mexico is making record foreign investments," he told Reuters.
Lured by a more stable legal and investment framework in Europe versus Latin America, large fortunes and family offices are using Spain as an entry point to the Old Continent.
"The trend is a reverse from what was seen 10-15 years ago when Spanish firms invested heavily in Mexico acquiring local banks and participating in bids to build major infrastructure projects," said Jim Seale, president of Seale & Associates, which is currently advising a Mexican firm looking to buy in Spain.
($1 = 0.7296 euros)
Additional reporting by Fiona Ortiz in Madrid and David Graham in Mexico City