UAE-based energy giant TAQA announced Tuesday that it has terminated negotiations to acquire a 40% stake in Spanish energy company Naturgy. The stake is currently held by investment funds CVC and GIP.
Discussions Terminate Without Agreement
“Discussions regarding a potential acquisition of CVC and GIP’s shares” and a pact with Naturgy’s largest shareholder, Criteria Caixa, “have ended,” TAQA stated in a brief statement to Abu Dhabi’s stock exchange authorities.
Consequently, “this transaction will not take place,” the UAE group, which operates in a dozen countries, confirmed in the statement.
Criteria Caixa Confirms End of Negotiations
In a note sent to the Spanish stock market regulator (CNMV) on Monday evening, Criteria Caixa had already announced the end of discussions with TAQA “for a possible cooperation agreement relating to Naturgy,” stating that “no agreement was reached.”
The investment holding company of La Caixa bank reiterated its “support” for Naturgy’s “transformation plan” and mentioned its ongoing search for “potential partners” to “accelerate” the Spanish group’s “energy transition.”
Reasons for Termination Remain Undisclosed
Neither TAQA nor Criteria Caixa specified the reasons for ending the negotiations. However, Spanish media reports suggest that disagreements over the valuation of the Spanish group played a role.
Initial Acquisition Plans
TAQA, specializing in gas and oil exploration, announced on April 17th that it had initiated “discussions” to acquire the 41% of Naturgy held by CVC and GIP, as part of a potential takeover bid.
At the time, TAQA also mentioned discussions with Criteria Caixa, which holds 26.7% of Naturgy, about a “possible cooperation agreement” concerning the Spanish group. Criteria Caixa would have remained a strategic shareholder if TAQA had taken control of Naturgy.
Market Reaction and Naturgy’s Performance
The announcement of the end of discussions between the two companies caused Naturgy’s share price to plummet by over 12% on Tuesday morning, in a slightly declining market (-0.80%).
Naturgy, formerly Gas Natural Fenosa, saw its net profit increase by 20% last year to 1.99 billion euros, despite lower energy prices and a sharp rise in investments, particularly in green hydrogen.
Ongoing Discussions and Future Outlook
The group, which jointly manages the Medgaz gas pipeline connecting Spain to Algerian gas fields with the Algerian group Sonatrach, has been the subject of multiple discussions since the partial takeover bid launched in 2013 by the Australian pension fund IFM, which currently holds 13% of the company. The future of Naturgy and its role in Spain’s energy transition remain subjects of ongoing interest and speculation.