Spain’s Repsol sells 25% of oil and gas unit to EIG for $4.8 bln

A man walks past the logo of Spanish oil major Repsol at its headquarters in Madrid, Spain, February 25, 2016. REUTERS/Juan Medina/File Photo

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MADRID, Sept 7 (Reuters) – Spanish energy group Repsol (REP.MC) has agreed to sell a 25% stake in its oil and gas exploration and production unit to U.S. fund EIG for $4.8 billion including debt, it said on Wednesday, confirming a previous Reuters report that the two were in talks.

The deal values the whole business at $19 billion including debt, and may lead to a stock market listing of a minority stake in the unit in the United States from 2026 onwards, Repsol said in a statement.

The process started with an unsolicited offer from EIG, sources told Reuters earlier this year. read more

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The deal promises to bring in cash as Repsol looks to invest in growing its renewables business, in line with other European oil and gas companies who are facing pressure from shareholders and regulators to cut their planet-warming carbon emissions.

News of early talks sent Repsol’s shares to a 14-year high in June. Repsol said on Wednesday it would retain control of the business.

Based in Washington DC, EIG specialises in private investments in energy and energy-related infrastructure. Last year, it led a consortium that spent $12.4 billion on a 49% stake in oil giant Saudi Aramco’s (2222.SE) pipelines business.

Repsol’s total market value has risen almost 30% this year after COVID-19 brought it crashing to multi-year lows, and is currently around 19.6 billion euros ($19.4 billion).

Oil and gas firms’ upstream divisions are typically complex, and Repsol has been working to simplify a structure of more than 100 individual units.

It has disposed of stakes in exploration businesses in several countries, and sold its Russian assets to Gazprom Neft in January. read more

($1 = 1.0113 euros)

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Reporting by Isla Binnie; Editing by Jan Harvey

Our Standards: The Thomson Reuters Trust Principles.

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