Oil companies Moeve and Galp cancel their merger after nine months of negotiations

Spanish energy firm Moeve and its Portuguese counterpart Galp have terminated negotiations to merge their downstream businesses, ending a nine-month effort to create a major Iberian energy player. In a joint statement released early Monday, October 26, both companies announced that they failed to agree on definitive terms that met their respective strategic and financial criteria for a durable and value-generating alliance. This decision closes the door on a non-binding agreement reached in January regarding the potential integration of their refining, distribution, and service station operations. The collapse of talks follows a timeline marked by shifting deadlines. Initially, the groups planned to conclude negotiations by mid-year. However, in July, they extended the deadline through the second half of 2026. Industry sources indicated that the international energy crisis, triggered by the outbreak of conflict in the Middle East at the end of February, contributed to the breakdown. The resulting market volatility complicated an already intricate transaction. The proposed deal was originally designed to form two complementary European energy platforms. The first platform, named IndustrialCo, would have focused on business-to-business services including refining, chemicals, trading, green molecules, and low-carbon fuels. The second, RetailCo, would have handled fuel sales, electric vehicle charging, and convenience services for retail customers while developing new-generation mobility solutions. Under the proposed structure, Moeve’s current shareholders, Abu Dhabi-based Mubadala and US private equity firm Carlyle, would have held an 80 percent controlling stake in IndustrialCo. Galp would have retained a share exceeding 20 percent. This industrial entity would have consolidated the refineries in Cádiz and Huelva, Spain, along with Galp’s refinery in Sines, Portugal. Ownership of RetailCo would have been split equally, with each group holding 50 percent. The combination excluded other Galp assets such as upstream exploration and production, renewables, and oil, gas, and energy supply and trading. Market observers had estimated the total value of the operation at more than 15 billion euros. The merger would have created a giant with over 3,000 service stations, capable of processing 700,000 barrels of oil per day. Such scale would have positioned the new entity to challenge Spanish rival Repsol for leadership in the Iberian market. It would also have established a leading position in the market for green molecules, including ammonia and hydrogen. In Portugal, the potential loss of control over the Sines refinery raised concerns among government officials. As the country’s only refinery, Sines is considered critical infrastructure. Portuguese Energy Minister Maria da Graça Carvalho told parliament this summer that the government was analyzing the operation and considering imposing conditions to protect national strategic interests. The presence of extra-European ownership in Moeve’s capital, specifically Mubadala’s 61 percent stake and Carlyle’s remaining interest, weighed on the balance of considerations for Lisbon. Maarten Wetselaar, chief executive officer of Moeve, stated that the company remains fully focused on executing its “Positive Motion” strategy through 2030. He emphasized that this strategy has always been independent and that the potential combination with Galp represented an opportunity to accelerate value creation but was never a condition for execution. “After extensive conversations, it was not possible to reach a commercial agreement with Galp,” Wetselaar said. He added that the company is committed to executing its transformation with financial discipline and generating sustainable long-term value. Moeve has recently accelerated its transition toward sustainable fuels. The company began construction of Europe’s largest green hydrogen project for energy production, which has an initial capacity of 300 megawatts and involves an investment exceeding one billion euros. Additionally, Moeve is nearing completion of southern Europe’s largest second-generation biofuels complex, with operational start-up scheduled for 2027. The company has divested more than 70 percent of its oil exploration and production assets and redirected two-thirds of its investments to industrial energy transition projects. To further streamline operations, Moeve presented a new operating model aimed at accelerating the execution of the Positive Motion strategy. This model seeks to build a more agile and efficient organization characterized by high-level industrial execution and a customer-focused market approach. The termination of the merger leaves both companies to pursue their individual paths in a fragmented European energy landscape. The failure to close the deal means the anticipated consolidation of refining and retail networks will not proceed under the previously outlined framework. Both firms have returned to focusing on their separate corporate objectives amidst ongoing geopolitical tensions affecting global energy markets. The specific financial terms that remained unresolved were not disclosed publicly, leaving the exact point of divergence between the two parties unclear to outside observers. The announcement marks the end of a period of uncertainty for employees and stakeholders who had anticipated a unified corporate structure spanning the Pyrenees.