Repsol has boosted its multi-energy transformation, strengthened its leadership in the energy transition, and advanced the fulfilment of key objectives of its 2021-2025 Strategic Plan by partnering with EIG, a U.S. institutional investor in the global energy and infrastructure sectors, in its exploration and production business.
EIG will acquire 25% of the upstream business for $4.8 billion (€4.8 billion). This transaction, approved by the Board of Directors of Repsol, values the upstream business at $19 billion (€19 billion), which exceeds analysts’ consensus valuations of the unit. The agreement between Repsol and EIG includes the possibility of listing a minority stake of the business in the United States from 2026 onward, subject to favourable market conditions.
With this agreement, Repsol advances its 2025 strategic goals of accelerating the energy transition with flexibility, ambitious and profitable business growth, financial solidity and shareholder remuneration, which is amongst the best in the industry and the Ibex 35 index. Repsol ́s Strategic Plan contemplates the inclusion of partners or investors in some businesses to accelerate the achievement of objectives and maximize the return of company operations.
The plan deployed an operating model of four business areas; Upstream, Industrial, Client and Low Carbon Generation in a framework of increasing shareholder remuneration with investment oriented to achieving zero net emissions by 2050.
Repsol, as the majority shareholder, will retain control of the upstream business, which will continue to be consolidated within the accounts of the Repsol Group. Repsol will appoint four directors to the eight-person board, including the chairman, with a casting vote. EIG will appoint two board members, and the other two will be independent directors.
The newly structured entity will maintain its workforce and existing management team as well as the current business plan focused on further strengthening, high grading, and decarbonizing its global portfolio. EIG will contribute its unique track record of investing across the capital structure of the global E&P sector to seek to maximize value creation and boost the strengths of Repsol’s Upstream unit. The newly structured global E&P entity will adopt existing Repsol ESG upstream targets and policies, further reinforcing and elevating them with EIG’s ESG standards.
EIG is a provider of institutional capital to the global energy and infrastructure sectors and committed to influencing ESG industry best practices across its portfolio. With four decades of industry experience and a long-term track record of investing capital in energy, including upstream and energy-related infrastructure, EIG has committed more than $41.5 billion to the energy sector across 38 countries.
The transaction is expected to close within the next six months once the corporate structure of the upstream business has been concluded, subject to customary regulatory approvals
Allen & Overy team advising Repsol on this deal was led, from the Madrid office, by partner Iñigo del Val, senior associate Reka Palla, associate Carlota Roldán Vázquez (Corporate), partners Ignacio Ruiz-Camara and Tom Wilkinson (Banking) and, from London office by partner John Geraghty and lawyer Cathy Gilmartin (Corporate).
Latham & Watkins advised EIG with a team led by London Corporate partners Sam Newhouse and Simon Tysoe and London associate George Venables, together with London associates Emily Smith and Saavan Shah, and Madrid associates Marta Portuondo and Carmen Esteban. Advice was also provided on Finance matters by London partners Tom Bartlett, Conrad Andersen, and Dean Naumowicz, with associates Delyth Hughes and Misa Schmiederova; on Tax matters by London partner Karl Mah, with associates Aoife McCabe and Lina LeRoux; on Antitrust matters by London partner Jonathan Parker and Washington, D.C. counsel Ruchi Gill and Damara Chambers, with London associates Nadeem Brora and James Mathieson; and on Sanctions matters by London partner Charles Claypoole and Washington, D.C. partner Eric Volkman, with London associate Thomas Lane and Washington, D.C. associate Ragad Alfaraidy.
An EY Abogados Tax team advised Repsol on this transaction in nearly 40 jurisdictions, with a team led by Cástor Gárate (leader of the international Tax and Transactions team), together with specialist partners from the International Tax and Transactions teams – Isabel Hidalgo and Anil Bharwani – and Transfer Pricing – Marcos Pérez -, as well as a large group of more than 100 professionals from the nearly 40 jurisdictions involved under the supervision and coordination of Jesús González and Rafael Álvarez-Mendizábal.
