US buyout giant Carlyle has agreed to buy a 30 per cent stake in Spanish oil and gas company Cepsa from an Abu Dhabi sovereign wealth fund, in a $3.6bn deal including debt.

The sale gives the business a total enterprise value of $12bn, roughly the same price tag that the Mubadala fund was seeking ahead of a failed attempt at a stock market listing last year.

As part of the agreement, first reported by the Financial Times, Carlyle reserves the right to buy up to 40 per cent of Cepsa, which is one of the largest privately owned oil companies in Europe and has been under Mubadala ownership for the last three decades. The deal is expected to close by the end of the year, pending regulatory approval.

Carlyle will have at least two board seats, and Musabbeh Al Kaabi, a senior executive at Mubadala, will remain as chairman.

Cepsa generates about 175,000 barrels a day of production worldwide, including its stakes in two fields in Abu Dhabi. It also operates refineries and chemical plants in Spain and elsewhere, as well as having a number of power-generating assets.

Marcel Van Poecke, Head of Carlyle International Energy Partners, said: “We look forward to building upon Cepsa’s growth path for the benefit of their customers, suppliers and employees”.

Mubadala, which will remain a majority shareholder, said it was pleased by the prospect of “working in partnership with Carlyle, which has a significant track record and energy sector capabilities”.

Carlyle put in an initial bid for Cepsa last year, but it was rejected by Mubadala, which believed it could get a better deal through a stock market flotation, one person familiar with the matter said. The planned listing of 25 per cent of Cepsa on the Spanish stock exchange was later pulled, citing poor interest and weak market conditions.

Cepsa’s transaction comes after a recovery in oil prices, which this year have reached close to $70 a barrel from below $30 at the start of 2016, leading to bullish assumptions of dealmaking in the sector.

It also comes as the Washington-based private equity group is seeking to raise $4bn for oil and gas assets outside North America while others reel in spending. The deal, which will involve Carlyle writing an equity cheque of about $2.4bn, will be funded partly by this new fund, and partly by co-investors. The levels of debt in the company are expected to remain the same under this transaction.

Prospective bidders had expressed concerns over the Spanish energy company’s involvement with a project partially financed by 1Malaysia Development Berhad, a state fund under investigation for money laundering.

Money misappropriated from 1MDB was used to partly finance the $2.2bn acquisition of Houston-based Coastal Energy — alongside International Petroleum Investment Company, an Abu Dhabi entity since merged with Mubadala — US prosecutors have said.

The Cepsa IPO prospectus warned that the US Department of Justice alleges the Coastal Energy transaction was “part of a broader alleged money-laundering scheme”.

But people familiar with the Cepsa sale said Carlyle had been a preferred bidder for a deal with Mubadala, which has been a longstanding investor in the US buyout group’s funds.

Other interested parties included New York-based asset manager Blackstone and Canadian pensions group CPPIB among others, these people said.

A successful deal is the clearest sign that concerns were appeased.

“This is the greatest outcome for Cepsa because public markets only seem to pay attention to the short-term movement in oil prices and don’t appreciate a company like [this],” said a person involved in the deal.

Separately, Carlyle has been busy snapping up assets energy assets, including Neptune, which it set up with rival CVC, and Varo Energy, which it established alongside commodities trader Vitol.

Additional reporting by David Sheppard and Anjli Raval in London.

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