Several months after announcing an agreement in principle to merge their businesses, it has been revealed that Moeve and Galp have called off talks. It was reported early on Monday the 26th, because they “did not reach certain conditions that meet their strategic criteria”, as reported by the newspaper ABC.
If that had happened, the result would have been a giant of 3,500 service stations and total sales of more than 6.5 million tons of petroleum products, reports El Economista, which would have allowed them to challenge Repsol for commercial supremacy.
A non-binding contract. Last January it was revealed that Spain’s second-largest oil company and Portugal’s first had begun entering negotiations for a merger. On the table were the traditional refining and distribution and sales businesses, and the intention to take the lead in the Iberian energy market ahead of the leading company Repsol. Although a deal was expected by the middle of the year, in July they pushed back the deadline for negotiations and postponed a decision to the second half of 2026. Finally, the decision has arrived.
According to the statement, the companies blamed fuel market and price volatility for the breakup. The president of Gallup’s board of directors, Paula Amorim, lamented the lack of agreement and the lost opportunity it represents to create a European operator. In parallel, Moeve CEO Maarten Wetzselaar said that, after the lack of alliances, the Spanish company will be fully focused on continuing to drive its transformation.
Two energy platforms. The deal contemplated the merger of very relevant parts of both companies, although it would not be a complete merger in any case. On the one hand, an industrial platform, IndustrialCo, will be created to centralize B2B businesses, such as refining, chemical, TradingGreen molecule or low carbon fuel. In this section, also, the groupings of Cádiz and Huelva refineries in Spain and Sines in Portugal were foreseen. The latter, being the only one in the country, gave rise to some doubt as to the loss of the sovereignty of the Portuguese power. On the other hand, RetailCo will also be established, which will focus more on mobility and fuel sales, electric vehicle charging and other services for retail customers.
Energy conversion does not stop with breaks. What’s interesting about this transaction is that from now on, both companies will continue their separate paths towards a common objective: moving towards an alternative to oil, using the specific advantages of traditional businesses to finance that transition. As El Pais explained in February, oil companies are looking to restructure and separate industries and clients to spread risk in the face of regulatory and financial challenges posed by the energy transition.
On the one hand, Moeve has started construction of Europe’s largest green hydrogen project for sustainable energy production as part of its strategy. positive momentum. Furthermore, El Mundo said that the company has already invested more than 70% of its oil exploration and production assets and redirected two thirds of its investments towards energy transfer projects. On the other hand, Galp will maintain its long-term commitment to transform its commercial and industrial operations to become more sustainable and competitive, although it will continue to focus on its growth. upstream and early stages of the supply chain.
Such was the Iberian giant. The photograph would look like this: Move shareholders, UAE sovereign investment fund Mubadala and American group Carlyle will control IndustrialCo with 80%, while Galp will keep the remaining 20%. For RetailCo, the two companies will share 50% control, leaving the other Gallup businesses.
All this will be realized in an Iberian network of more than 3,500 service stations (compared to competitor Repsol’s 3,800, according to RTP) and a combined crude oil processing capacity of around 700 thousand barrels per day. The operation as a whole was worth, according to market sources reported by El Mundo, more than 15,000 million euros and there was a good stock market reaction that was not sustained after the announcement of the breakup, at least in the case of Gulp.
Picture | Thomas Zielonka
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