Carlyle to buy up to $4.8bn stake in Cepsa from Abu Dhabi's Mubadala

Co-Chief Executive officer of The Carlyle Group, Kewsong Lee. (File photo/AFP)
Updated 09 April 2019

Carlyle to buy up to $4.8bn stake in Cepsa from Abu Dhabi's Mubadala

MADRID: US buyout firm Carlyle Group has agreed to buy between 30 and 40 percent of Spanish energy company Cepsa from Abu Dhabi state investor Mubadala, valuing the stake at as much as $4.8 billion.
The transaction marks the successful end of a quest by Mubadala for a new partner in Cepsa after it pulled the Spanish group's stock market flotation last year, citing uncertainty in international capital markets.
Mubadala said on Monday the deal gave Cepsa a total enterprise value of $12 billion.
Reuters had reported in March that Carlyle, with $216 billion of assets under management as of December, was ahead of other contenders to buy a 30 percent stake in Spain's Cepsa for up to €3 billion ($3.4 billion).
Mubadala said the deal is expected to be completed by the end of 2019, pending regulatory approval, and the final stakes of both parties will be confirmed at that time.
“We now look forward to working in partnership with Carlyle, which has a significant track record and energy sector capabilities, and with Cepsa’s management to further enhance and grow the business,” said Musabbeh al Kaabi, Mubadala's chief executive, Petroleum & Petrochemicals.
Mubadala, with assets of $225 billion including a stake in Carlyle, will remain the majority shareholder of Cepsa.
Madrid-headquartered Cepsa is Europe's largest privately-owned oil and gas company. It reported a 15 percent fall in annual adjusted net profit to €754 million last year.
Rothschild was the sole financial advisor to Mubadala while HSBC and J.P. Morgan advised Carlyle.
Equity for the Cepsa investment will come from Carlyle International Energy Partners I and II, Carlyle Partners VII, and Carlyle Europe Partners V and co-investors. 


WEEKLY ENERGY RECAP: Keeping things in balance

Updated 08 December 2019

WEEKLY ENERGY RECAP: Keeping things in balance

  • The over-compliance will result in cuts of 1.7 million bpd

Brent crude rose above $64 per barrel after OPEC+ producers unanimously agreed to deepen output cuts by 503,000 barrels per day (bpd) to a total 1.7 million bpd till the end of the first quarter of 2020.

The breakdown is that OPEC producers are due to cut 372,000 bpd and non-OPEC producers to cut 131,000 bpd.

Current market dynamics led to this decision as oil price-positive news outweighed more bearish developments in the US-China trade narrative that has weighed on oil prices throughout the year, with US crude exports rising to a record 3.4 million bpd in October versus 3.1 million bpd in September.

OPEC November crude oil output levels at 29.8 million bpd show that producers were already overcomplying with its current 1.2 million bpd output cuts deal by around 400,000 bpd. 

The over-compliance will result in cuts of 1.7 million bpd, especially when Saudi Arabia continues to voluntarily cut more than its share.

This makes the agreed 1.7 million bpd output cuts pragmatic since it won’t taken any barrels out of the market.

It isn’t a matter of OPEC making room in the market for other additional supplies from non-OPEC sources, as OPEC barrels can’t be easily replaced.

Instead, this is about avoiding any oversupply that might damage the global supply-demand balance.

Saudi energy minister Prince Abdulaziz bin Salman has effectively kept his promise and managed to smoothly forge a consensus among OPEC and non-OPEC producers.

He has also successfully managed the 24-country coalition of OPEC+ including Russia in reaching an agreement.

Despite suggestions otherwise in recent coverage of the Vienna meeting, the deeper cuts announced on Friday have nothing to do with the Aramco IPO. Let’s remember this meeting was scheduled six months ago and the IPO has been in the works for much longer.

The Aramco share sale did not target a specific oil price. If that was a motivating factor it could easily have chosen another time.