Spain’s Criteria is in talks to sell a stake in the Naturgy group

The Spanish holding group, Criteria, said in a statement on Tuesday that it is in talks with an investment group that is negotiating with major shareholders in the Naturgy Energy Group to reach a possible partnership agreement.

According to Reuters, the Spanish newspaper Cinco Dias reported earlier today, Tuesday, citing undisclosed market sources, that the Emirati energy company is in talks with the three largest shareholders in Naturgy, including Criteria, to discuss potential acquisition opportunities.

Criteria said it was not part of the talks between the third party and other shareholders of Naturgy and could not provide any information in this matter. She added that discussions with an investor, whom she did not mention by name, are at a “preliminary stage and it is not possible to predict the outcome.”

Naturgy shares jumped about seven percent in morning trading in Madrid, while the broader market fell 1.4 percent.

The Cinco Dias newspaper added in its report that the negotiations, which include the Spanish holding company Criteria and the direct investment funds GIB and CVC, began more than a month ago with the knowledge of the Spanish government.

Criteria, the main shareholder of Caixabank, owns a 26.7% stake in Naturgy. The GIB and CVC direct investment funds each have a share of about 20%.

The Abu Dhabi Energy Corporation, owned by Abu Dhabi’s sovereign wealth fund ADQ, owns more than 90% of TAQA.

If the newspaper’s report is true, TAQA will have to submit a complete takeover offer for the entire company, as Spanish law requires submitting a mandatory purchase offer when the buyer wants to acquire more than 30 percent of any public joint stock company.

Angel Simon, CEO of Criteria, said during a trade event in Madrid on Monday that the company aims to “strengthen its presence among strategic Spanish companies in the banking, energy and water sectors.”

According to data from the London Stock Exchange Group, the value of a 40% stake in Naturgy is just over eight billion euros. Naturgy’s market value is about 20.2 billion euros ($21.42 billion).

A Spanish Energy Ministry spokesman said: “This is a key company in the Spanish energy system and we want stability and commitment to decarbonisation and energy security.” He refused to go into details.

Cinco Dias newspaper said that its sources assumed that certain conditions would be imposed on TAQA in exchange for the Spanish government’s approval of any deal.

The newspaper report added that Naturgy’s main strategic assets are gas contracts concluded with Algeria.