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Galp issued a statement on Monday confirming that, after several months of negotiations, “it was not possible to reach an agreement” on the proposed combination of its downstream, refining and distribution activities with those of the Spanish company Moeve, whose shareholders are Mubadala Investment Company (Abu Dhabi) and the US group Carlyle.
The Portuguese oil and gas company stressed, however, that this outcome has no impact on its operations or on confidence in the company.
“Galp holds an exceptionally strong position, with one of the most attractive upstream growth profiles in the sector, robust industrial and commercial businesses and a diversified portfolio that includes renewables and significant trading activities. This business mix, combined with a solid balance sheet and strong cash-flow generation capacity, gives Galp a firm foundation to continue growing, investing and creating value,” wrote Paula Amorim, chair of Galp’s Board of Directors.
Maarten Wetselaar, CEO of Moeve, also wrote in a statement that the combination with Galp “represented an opportunity to accelerate value creation”, but that its strategy was never dependent on that deal going ahead. “After extensive discussions, it was not possible to reach a commercial agreement with Galp. We remain focused on executing our transformation with financial discipline and on generating sustainable long-term value.”
The Portuguese online newspaper ECO (source in Portuguese) had reported on Sunday night that the deal had fallen through because Paula Amorim had not agreed to the Spanish company’s demands, according to sources familiar with the talks.
Galp’s downstream business is underpinned by “a leading retail network” in Portugal and by “a significant portfolio of energy transition projects in Sines”, the statement adds. These include one of Europe’s largest green hydrogen production projects using electrolysis and a biofuels production unit.
The company also revealed on Monday, in its quarterly results and financial disclosure, that its net profit jumped 68% year on year in the third quarter, to 682 million euros. “The increase in oil and natural gas production in Brazil to a new record, the strong performance of exports and oil and gas trading activities in international markets” are said to have driven the result.