Galp-Moeve Iberian fuels deal at risk of collapse

Galp’s planned merger of its Iberian refining and fuel distribution businesses with Spain’s Moeve has entered a critical phase and may collapse, ECOnews has learned from two sources familiar with the matter, a setback with implications for Portugal’s only fuel refinery and Galp’s downstream strategy.

According to the information obtained by ECOnews, the two companies remain divided over the terms of the transaction. Galp’s main shareholder, Paula Amorim, did not accept demands made by the Spanish group, which is controlled by Abu Dhabi’s Mubadala and Carlyle, and may already have ended the talks. Galp has declined to comment officially.

ECOnews also learned that Galp’s board met on Friday afternoon to discuss a final decision on the deal, which executives had previously said they expected to sign in October. One person familiar with the process said the transaction is in a “very critical phase”. Galp is due to report third-quarter results on Monday before the market opens, when investors may seek clarification on the future of the assets involved.

The proposed transaction would have created an industrial joint venture combining the Sines refinery in Portugal with two Moeve refineries in Spain, with Galp holding more than 20% of the new company. The two groups also planned to combine their fuel station networks in the Iberian market through a separate joint venture owned roughly equally by both sides.

The deal had drawn political attention in Portugal because Sines is the country’s only fuel refinery. Earlier this month, Economy Minister Castro Almeida said the government was prepared to allow the transaction to go ahead provided the agreement protected the strategic importance of Sines.

Originally published at Eco.pt