EIG will acquire 25% of the Repsol upstream business for $4.8 billion (€4.8 billion).
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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 favorable market conditions.
Repsol, as 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.
“Our ambition is to lead the energy transition. This pioneering agreement allows us to maintain the strategic direction of the upstream unit and, at the same time, to boost the transformation of the company and its multi-energy profile to achieve zero net emissions by 2050," said Repsol CEO Josu Jon Imaz.
“Energy transition informs every decision we make, and we are thrilled to partner with a global leader of Repsol’s stature on this compelling opportunity to lead change in our industry,†said R. Blair Thomas, EIG’s Chairman and CEO.
“Evaluation of ESG impact is integrated into EIG’s core investment and portfolio management functions, and we look forward to working with Repsol, a world-class operator and energy transition leader, to continue building on the business’s ESG best practices. As the world looks to meet the twin goals of decarbonization and reliability, we believe this partnership is well positioned to help meet the growing global demand for accessible, efficient, and safe energy.â€
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. ■