Spain Is Said to Favor Indra Asset Sales Over Corporate Split

Spain’s government is opposed to an activist’s push to spin off or sell Indra Sistemas SA’s entire technology unit, according to people familiar with the discussions.

The government would prefer to retain a combined defense and information technology company while divesting some of Indra’s IT assets, such as underperforming units in certain regions, the people said. The proceeds could then be used to invest in the defense business while simultaneously streamlining operations, they said.

The deliberations come as Indra seeks a new chief executive officer after announcing earlier this month that current CEO Ignacio Mataix will step down. The ...