TAQA Withdraws from Major Acquisition of Spain’s Naturgy

Planned Takeover Falls Through After Negotiations Stall

by Victor Adetimilehin

In a significant development within the global energy sector, the planned acquisition of Spanish gas giant Naturgy by Abu Dhabi’s TAQA has come to an unexpected halt. Criteria, a Spanish holding firm that holds a 26.7% stake in Naturgy, confirmed that discussions with TAQA had concluded without reaching an agreement. This news follows speculative reports from El Mundo newspaper, which cited sources familiar with the situation, indicating that TAQA had decided to abandon the joint bid with Criteria. The cessation of these talks marks a notable collapse in what would have been one of the largest international takeovers in the energy sector.

Details of the Stalled Deal

The negotiations, which had been closely watched by the market, were aimed at forging a powerful alliance that would bolster TAQA’s presence in Europe and enhance Naturgy’s capacity to meet growing energy demands. Naturgy, a pivotal player in the European gas market, is not only Spain’s largest gas company but also holds significant contracts for gas imports from Algeria and Russia, amounting to approximately 3 billion cubic meters of liquefied natural gas (LNG) annually. The deal’s collapse leaves Naturgy’s strategic future uncertain and opens up questions about the next steps for both TAQA and Criteria in the competitive energy market.

With Naturgy’s market value pegged at 24.3 billion euros, the aborted transaction shakes up expectations and strategies not only for the involved parties but also for the broader market. Following the announcement, Criteria communicated to Spain’s market supervisor CNMV that it is “exploring new options” to support Naturgy’s transformation plan and reaffirmed its commitment as a long-term investor. Meanwhile, TAQA stated in a regulatory filing that the discussions on a potential cooperation agreement and the possible acquisition of shares in Naturgy have concluded without the fruition of a deal.

Stakeholder Responses and Future Speculations

The breakdown of negotiations also impacts other major stakeholders, including private equity funds CVC and GIP, each holding over 20% of Naturgy, and the Australian fund IFM with a 15% stake, all of whom have remained silent post-announcement. The decision by TAQA and Criteria to terminate their discussions without an agreement not only reflects the complexities and challenges of major cross-border acquisitions but also hints at possible shifts in investment strategies among Europe’s energy elites.

As the dust settles on this failed negotiation, the energy sector is left to speculate on the potential realignments and strategic shifts that may follow. The cessation of this high-profile deal could prompt other industry players to reassess their positions and strategies in a market that is increasingly influenced by geopolitical tensions and economic uncertainties. For Naturgy, the focus may shift towards strengthening its existing operations and exploring new partnerships or investment opportunities that align with its long-term strategic goals.

Source: Reuters

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