The Spanish government is open to TAQA’s offer for Naturgy

Spain said on Friday it was open to a possible takeover bid for energy company Naturgy by Abu Dhabi’s TAQA. The government said the government would defend its strategic interests, which did not mean it would block the “operation.”

TAQA confirmed on Wednesday that it was in discussions with Naturgy’s three main shareholders about a possible bid for Spain’s largest natural gas company.

Given Naturgy’s strategic role in the country’s energy system, the government should legally have a say in such an operation.

“I spoke about the need to be vigilant and guarantee energy security to defend Spain’s strategic interests,” Energy Minister Teresa Ribera said when asked about this transaction potential during a press conference. “This does not mean that any company or investor should veto it.

Spain has already shown it has the mechanisms in place to protect its interests when it approved Australian fund IFM’s partial takeover bid for Naturgy in 2021, Ms Ribera said. The government has set conditions to protect employment, investments and the supply of gas and electricity.

“The control or vigilance mechanisms for investments from third countries were activated and certain conditions were introduced, and I think it worked properly,” she said.

Last year, Spain faced a similar decision after Saudi company STC acquired a 9.9% stake in telecommunications company Telefónica. In December, the government said it would buy a stake of up to 10% in Telefónica as a counterweight.

Mr Ribera stated that the government “will closely monitor the evolution of these negotiations (on Naturgy) and, where appropriate, the characteristics of the conditions under which an investor from outside the Community can gain access to the company’s capital”.

Naturgy has an interest in an important gas pipeline between Spain and Algeria. It also signed a long-term contract to import about 3 billion cubic meters of Russian liquefied natural gas annually. (Reporting by Pietro Lombardi; additional reporting by Emma Pinedo; Writing by Charlie Devereux and Elaine Hardcastle)