PJT Partners: advisor to Repsol in the sale of 25% of its oil production business to the EIG fund – Okdiario

PJT Partners has acted as advisor to Repsol in the agreement for the sale of 25% of its hydrocarbon exploration and production business (Upstream) to the US fund EIG in an operation valued at around 4,850 million euros. This financial advice has been led by Borja Artega, partner of the PJT Partners Strategic Advisory Group, together with the Madrid and London teams. According to what Repsol informed the National Securities Market Commission (CNMV), with this operation it promotes its transformation into a multi-energy company, reinforces its leadership in the energy transition and advances the fulfillment of the key objectives of the 2021-2025 Strategic Plan. This transaction, approved by Repsol’s Board of Directors, values ​​the company’s Exploration and Production business at 19,000 million dollars, above the consensus of analysts. In addition, EIG and Repsol contemplate the possibility of going public with a minority stake in the United States s of this business from the year 2026, provided that favorable market conditions exist. With this agreement, Repsol advances the fulfillment of key objectives of its strategy to 2025, based on the acceleration of the energy transition, with flexibility and ambitious growth and profitable business, financial strength and shareholder remuneration that is among the best in the sector and on the Ibex-35. Repsol’s Strategic Plan contemplates the entry of partners or investors in some businesses to speed up the achievement of objectives and maximize the return of the company’s operations.Repsol, as the majority shareholder, will maintain control of the Upstream business, which it will continue to consolidate within the Group’s accounts.Repsol will appoint four of the eight members of the Board of Directors, including the chairman of the new company, which will have a casting vote. EIG will nominate two and the other two will be independent. The company created will maintain the existing staff and management team, as well as the current business plan, focused on strengthening, targeting and decarbonizing its asset portfolio. EIG will contribute its experience in previous investments in the global energy sector to maximize value creation and enhance the strengths of Repsol’s Upstream unit. The closing of the transaction is expected within the next six months, once the new structure is established Upstream business company. The transaction is subject to customary regulatory approvals.