Portugal weighing bigger Galp stake after Moeve merger collapse, minister says

Portugal May Boost Galp Energia Stake After Moeve Merger Falls Through

Government Response and Strategic Asset Protection

By Sergio Goncalves

LISBON, Nov 1 (Reuters) - Portugal's government is assessing whether to increase its 8% stake in oil company Galp Energia after the collapse of merger talks with Spain's Moeve, the economy minister said on Sunday as it seeks to safeguard strategic assets including the country's only oil refinery.

Merger Collapse and Market Impact

The two companies called off a merger of their downstream assets last week as the US-Iran war turned refineries from struggling businesses into prized assets, making long-term merger valuations difficult.

Official Statements on Merger Decision

Minister Manuel Castro Almeida told public radio Antena 1 and business newspaper Negocios that the merger's collapse was "a decision taken by both companies", stressing that the "government fully respects private enterprise and private property".

Energy Security and State Involvement

He added, however, that the government had "fulfilled its duty" by ensuring any ownership change at the Sines refinery, Portugal's sole refinery and a strategic asset, "posed no risk to energy security."

Potential Increase in State Stake

Asked whether the state could raise its 8% stake in Galp, Castro Almeida did not rule it out.

"If I tell you that is a possibility, Galp's shares will rise tomorrow. If I tell you it is out of the question, I would be lying," he said, adding that the government "will keep assessing" the option.

Broader Strategic Moves by the Government

His remarks fit a broader pattern of Lisbon reasserting control over strategic assets.

Portugal's state holding company Parpublica has bought a 5.3% stake in power and gas grid operator REN from insurer Fidelidade, controlled by China's Fosun, raising the government's stake in the strategic utility to 19%.

Background on Galp and Moeve Merger Talks

Galp and Moeve – owned by Abu Dhabi's Mubadala and US investment firm Carlyle – announced a non-binding agreement in January to explore merging some of their assets through two joint ventures.

The proposed joint venture would have combined Galp's Sines refinery with Moeve's Huelva and Algeciras refineries.

(Reporting by Sergio Goncalves; Editing by Alison Williams)