Last updated: February 16, 2011 11:42 pm

Abu Dhabi fund buys Spain’s Cepsa

International Petroleum Investment Co (Ipic), an Abu Dhabi sovereign wealth fund, will take full ownership of Cepsa, Spain’s second-biggest oil company, after purchasing a stake from France’s Total in a deal that values Cepsa at €7.5bn ($10.2bn).

The purchase of Cepsa, whose main activities are refining and fuel distribution in Spain and Portugal, fits with Ipic’s aim of building a global portfolio of investments in energy, petrochemicals and other sectors. Cepsa also has exploration and production interests in Latin America and north Africa.


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Total, which put its Lindsey oil refinery in the UK up for sale last year, said the Cepsa sale would help reduce its exposure to European refining.

Ipic already holds 47 per cent of Cepsa. It said on Wednesday it was buying the 49 per cent controlled by Total for €3.7bn and offering to acquire the remaining 4 per cent floated on Spain’s stock exchange.

Senior Spanish officials, apparently unmoved by the transfer of the stake from one foreign investor to another, expressed no immediate objection and described it as a market operation.

Although Spain has been wary of allowing strategic companies to be sold to outside investors, Enel, the Italian electricity group, took control of Spain’s Endesa in 2009, while British Airways merged with Iberia.

Ipic has had a stake in Cepsa since 1998 and bought a further 32.5 per cent from Santander, Spain’s biggest bank, two years ago.

A bond prospectus published in November last year revealed that Ipic’s assets doubled from 2007 to $48.2bn by last summer. These assets include a 70 per cent stake in industrial services provider Ferrostaal, a 64 per cent stake in Borealis, an Austrian petrochemical company, and 20.8 per cent in Japan’s Cosmo Oil.

Ipic is primarily focused on petrochemicals but its wholly owned subsidiary Aabar Investments has been used to snap up stakes in more unusual companies, such as Virgin Galactic, Daimler, AIG’s Swiss private bank and the Brawn Formula One team.

Ipic is chaired by Sheikh Mansour bin Zayed Al Nahyan, a senior royal who manages the office of the UAE’s president, among other roles. He led the group that bought the UK’s Manchester City football club and used Ipic as a vehicle to invest $5bn in Barclays, the UK bank.

Ipic is offering €28 per share for Cepsa, 23 per cent up on the closing price on Tuesday.

Total rebuffed suggestions that it might switch its Spanish investment from Cepsa to Repsol, the country’s biggest oil company, by buying a 20 per cent stake from Sacyr, the Spanish construction group.

Additional reporting by Jennifer Thompson in Paris

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