Morocco maneuvers in Abu Dhabi’s takeover bid for Naturgy to secure gas from Algeria

Morocco maneuvers in Abu Dhabi’s takeover bid for Naturgy to secure gas from Algeria
Morocco maneuvers in Abu Dhabi’s takeover bid for Naturgy to secure gas from Algeria
  1. Morocco, for gas from Algeria
  2. Banned from selling Algerian gas to Rabat
  3. The gas that Spain needs depends on Algeria
  4. Favor to Morocco upsets Algeria
  5. Abu Dhabi’s connections with Rabat
  6. Moncloa’s solution is La Caixa
  7. Demand that Taqa sell you 10%
  8. Arab investments in Spain
The Minister of Foreign Affairs, European Union and Cooperation, José Manuel Albares; and the Moroccan ambassador to Spain, Karima Benyaich.

Naturgy is a strategic company for Spain, and the Government has confirmed that it is not going to make it easy for Taqa, the Abu Dhabi energy company that is studying launching a takeover bid for 100% of the Spanish gas company. However, Moncloa has learned that the operation is of interest to Morocco and, therefore, has assumed that it cannot veto it.

Nothing has been signed yet, and the Emirati company, Taqa, 90% controlled by Abu Dhabi Developmental Holding Company, is in contact with the main shareholders of the company chaired by Francisco Reynés. But the Government has the last word.

Morocco, for gas from Algeria

As Confidencial Digital has learned from sources familiar with the operation, Moncloa has also been aware of Morocco’s interest in Abu Dhabi’s takeover bid for Naturgy, because gas from Algeria needs to be guaranteed.

Rabat does not overlook that the person in charge of supplying raw materials to Spain is precisely Naturgy, which has a long-term mega contract with Sonatrach, the state gas company controlled by the Algerian government and is a strategic partner of the company. At this moment, the review of the price at which Spain buys gas from Algeria has been under review for months and has not yet been closed.

As if that were not enough, the Algerian company is a shareholder in Naturgy, with 4% of the share capital. Their alliance also covers the main supply infrastructure. Naturgy and Sonatrach share 50% ownership of Medgaz, the gas pipeline that links Algeria and Spain for the supply of this raw material through the Mediterranean Sea.

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Banned from selling Algerian gas to Rabat

It is taken into account that, strictly speaking, Spain is not selling gas to Morocco. Spain’s role is limited to receiving in its regasification plants the ships with the gas that Rabat purchases from any supplier country, and then sending it to the Alawite country through the Tarifa (Cádiz) gas pipeline.

Madrid has thus been covering up Rabat in the midst of the energy crisis, while both countries intensify and try to redirect their bilateral relations.

The gas that Spain needs depends on Algeria

Sources from the Government’s economic leadership, consulted by ECD, now assume that they will have to give their authorization to the operation, without it endangering the security of national supply. And that’s where problems can arise.

Abu Dhabi’s interest in Naturgy occurs in the midst of a strong diplomatic confrontation between the emirate and Algeria, a country on which Spain has a highly energy-dependent relationship. One of the reasons for the hostilities would be Abu Dhabi’s support for the Moroccan people of the Sahara

Sonatrach, the state gas company controlled by the Algerian government, is the main supplier of the raw material. Gas from Algeria is more than a third of all the gas that Spain needs.

Favor to Morocco upsets Algeria

The nod to Morocco also contributes to further tense the diplomatic clash between Spain and Algeria, after the change of position of the Government of Pedro Sánchez on Western Sahara, supporting the Moroccan theses on the former Spanish colony.

Algiers maintains blocked commercial relations with Spain, with the consequent blow for companies that had the Algerian market as an export destination, and has only left its gas sales out of the boycott.

However, it has also threatened to break gas supply contracts signed with Spanish companies if it detects that part of the gas ends up being resold to Morocco, with which it has also broken diplomatic relations on behalf of the Sahara.

The Spanish Executive completely denies that Algerian gas can be redirected to Morocco and has activated a special plan to avoid such a possibility.

Abu Dhabi’s connections with Rabat

According to diplomatic sources, Algeria blames Abu Dhabi for the close relationship it maintains with its great adversary, Morocco, which would have financed, for example, the acquisition of a cyber espionage system to replace Pegasus.

NSO, the manufacturer of Pegasus, withdrew Rabat’s license to exploit it at the end of 2021 because it had misused this ‘malware’.

The President of the Government of Spain, Pedro Sánchez, gets off the presidential plane upon his arrival in Morocco.

Moncloa’s solution is La Caixa

The Government has to square the circle: unite the interests of the company’s shareholders, who are being favorable to the operation; avoid supply problems; and not at the same time bother Morocco, the investor Abu Dhabi, but not Algeria either.

For this reason, various media have published in recent days that a takeover bid in which La Caixa participates is the solution promoted by Moncloa. Furthermore, Criteria Caixa is interested in the successful completion of the operation to resolve Naturgy’s internal situation with the reorganization of capital and to continue controlling it.

La Caixa is an increasingly important partner for the Government. It has increased its stake to 5% in Telefónica and shares shares in CaixaBank. In addition, it would be willing to come to the rescue in the Talgo takeover bid, in front of Hungarian investors.

On the other hand, the relationships between managers close to the PSC and La Caixa in companies controlled by the State, such as Indra, Aena and Renfe, are increasingly visible. Therefore, denying him the solution he seeks in Naturgy would also pose a problem.

Demand that Taqa sell you 10%

In a second scenario, the Government is considering asking Taqa to give it up to 10% of Naturgy’s capital, as one of the conditions to authorize its takeover bid for the Spanish company.

The sources consulted by ECD assure that the Executive is considering using the card of national security to justify a landing in the capital of the gas company.

The option that Moncloa is considering involves linking the permits necessary to accept the offer with an agreement that facilitates the entry of the State into the company, as a method to guarantee its Spanishness, given the option that Taqa could exceed 50% of the capital.

The Emirati group could acquire up to 54% of Naturgy, through the takeover bid launched on 100% of the capital, including the percentage of the CVC and GIP funds and the 13% that is freely listed on the stock market. If the Australian fund IFM, which owns 15 percent, goes to the takeover bid, the percentage would go to almost 70%.

Arab investments in Spain

Abu Dhabi and other Middle Eastern countries, such as Saudi Arabia or Qatar, are important investors in strategic companies and sectors in Spain, such as Telefónica, Cepsa, Iberdrola, IAG or Colonial. Sources from the economic leadership of the Executive admit to ECD that the veto could also be seen as a hostile measure towards them.

In the entry operation of STC into Telefónica, the Government is trying to protect its interests with the presence of SEPI, aware that vetoing Saudi Arabia could leave Navantia without a multimillion-dollar contract for the construction of frigates destined for Riyadh.

The President of the Spanish Government, Pedro Sánchez, is received by the King of Morocco, Mohamed VI.

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