The coming nationalization of the YPF portion of Repsol YPF SA (OTC: REPYY.PK) by the Argentine government has killed a deal that the Spanish company had been reportedly negotiating with China Petroleum and Chemical Co. (NYSE: SNP), known as Sinopec, to sell Repsol’s 57% stake in YPF to the Chinese firm. Sinopec is a partner with Repsol in Brazil, and paid the Spanish company $7.1 billion for a 40% stake in Repsol’s Brazilian offshore assets.
According to reports in the Financial Times, Repsol wanted more than $10 billion for its stake in YPF and had hoped to get a deal agreed before going to Argentina’s President Cristina Kirchner. But she beat Repsol and Sinopec to the punch with yesterday’s announcement that the government would re-nationalize YPF.
Sinopec, of course, now has no intention of buying Repsol’s stake in YPF and the government of Argentina appears to have no intention of paying Repsol $10 billion or more for the Spanish company’s stake. Repsol shareholders can only lament the one that got away.
Paul Ausick
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