Portugal weighing bigger Galp stake after Moeve merger collapse, minister says

Carlyle

Sun 13:01

By Sergio Goncalves
LISBON, Nov 1 (Reuters) - Portugal's government is assessing whether to increase its 8% stake in oil company Galp Energia GALP.LS after the collapse of merger talks with Spain's Moeve, the economy minister said on Sunday as it seeks to safeguard strategic assets including the country's only oil refinery.
The two companies called off a merger of their downstream assets last week as the US-Iran war turned refineries from struggling businesses into prized assets, making long-term merger valuations difficult.
Minister Manuel Castro Almeida told public radio Antena 1 and business newspaper Negocios that the merger's collapse was "a decision taken by both companies", stressing that the "government fully respects private enterprise and private property". 
He added, however, that the government had "fulfilled its duty" by ensuring any ownership change at the Sines refinery, Portugal's sole refinery and a strategic asset, "posed no risk to energy security."
Asked whether the state could raise its 8% stake in Galp, Castro Almeida did not rule it out. 
"If I tell you that is a possibility, Galp's shares will rise tomorrow. If I tell you it is out of the question, I would be lying," he said, adding that the government "will keep assessing" the option.
His remarks fit a broader pattern of Lisbon reasserting control over strategic assets.
Portugal's state holding company Parpublica has bought a 5.3% stake in power and gas grid operator REN RENE.LS from insurer Fidelidade, controlled by China's Fosun 0656.HK, raising the government's stake in the strategic utility to 19%.
Galp and Moeve – owned by Abu Dhabi's Mubadala and US investment firm Carlyle CG.O – announced a non-binding agreement in January to explore merging some of their assets through two joint ventures.
The proposed joint venture would have combined Galp's Sines refinery with Moeve's Huelva and Algeciras refineries.
   

 (Reporting by Sergio Goncalves; Editing by Alison Williams)
 ((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters Messaging: sergio.goncalves.reuters.com@reuters.net))