Galp and Moeve fail to agree merger of refining and distribution operations
Galp and Moeve End Talks on Refining and Distribution Combination
Poinews.com – Galp and Spain’s Moeve have abandoned negotiations over a possible merger of their refining and distribution activities, ending months of discussions between two major energy companies on the Iberian Peninsula.
Galp confirmed on Monday that the parties had been unable to settle on terms for a transaction involving its downstream operations and the corresponding businesses at Moeve. Moeve is owned by Mubadala Investment Company of Abu Dhabi and US investment group Carlyle.
The proposed arrangement would have brought together assets linked to refining, fuel distribution and commercial energy activities. Neither company indicated that the failure to reach a deal would alter its existing operations or immediate strategic plans.
Galp says its growth strategy remains intact
The Portuguese group sought to reassure investors that the outcome does not weaken its business outlook. Galp highlighted its production assets, industrial activities, customer-facing operations, renewable projects and trading business as important parts of a diversified portfolio.
“Galp holds an exceptionally strong position, with one of the most attractive upstream growth profiles in the sector, robust industrial and commercial businesses and a diversified portfolio that includes renewables and significant trading activities. This business mix, combined with a solid balance sheet and strong cash-flow generation capacity, gives Galp a firm foundation to continue growing, investing and creating value,” wrote Paula Amorim, chair of Galp’s Board of Directors.
For Galp, the downstream business remains anchored by a large retail network in Portugal. The company also pointed to its energy-transition projects in Sines, where it is pursuing developments intended to reshape parts of its industrial footprint as energy markets move toward lower-carbon fuels.
Those projects include a green hydrogen development using electrolysis that is described as one of Europe’s largest, as well as a biofuels production unit. Green hydrogen is produced by using renewable electricity to separate water into hydrogen and oxygen, while biofuels can provide alternatives to conventional fossil-based transport fuels in certain applications.
The emphasis on these projects illustrates why a downstream transaction would have involved more than traditional refining and fuel sales. The sector is balancing established oil and gas businesses with investment in new energy infrastructure, often requiring large amounts of capital and long development timelines.
Moeve to continue transformation plan
Moeve’s chief executive, Maarten Wetselaar, said a combination with Galp could have accelerated value creation, but stressed that Moeve’s wider strategy was not reliant on completing the proposed deal.
“After extensive discussions, it was not possible to reach a commercial agreement with Galp. We remain focused on executing our transformation with financial discipline and on generating sustainable long-term value.”
The companies did not disclose the commercial issues that prevented an agreement. The talks had attracted attention because a combined refining and distribution platform could potentially have changed the competitive landscape for fuel and energy retailing in Portugal and Spain. With negotiations over, both groups will continue independently.
For customers, suppliers and employees, the immediate message is continuity: Galp said the decision has no effect on its operations, while Moeve has reaffirmed its commitment to its own transformation programme. The end of the discussions also means that any anticipated operational links, shared investments or broader integration plans will not proceed under the proposed agreement.
Strong third-quarter result for Galp
The announcement came alongside Galp’s latest quarterly financial release, which showed a substantial increase in profitability. Net profit reached €682 million in the third quarter, up 68% from the same period a year earlier.
Galp attributed the improvement to record oil and natural-gas production in Brazil, along with solid export performance and successful oil and gas trading in international markets. Brazil is particularly important to the company’s upstream profile, referring to the exploration and production side of the energy business rather than refining or fuel distribution.
The quarterly figures give context to Galp’s assertion that it can continue investing without the Moeve transaction. Higher production and stronger trading results can strengthen cash generation, although energy-sector earnings can still be influenced by commodity prices, production performance, refining conditions and demand in global markets.
Galp’s statement presents the company as capable of advancing several priorities at once: maintaining its conventional energy operations, serving retail and commercial customers, developing transition projects and expanding where it sees attractive growth opportunities. The failed negotiations do not remove those priorities, but they leave Galp to pursue them without a merger involving Moeve’s downstream assets.
For Moeve, the result similarly places greater focus on its standalone plans and on financial discipline as it carries out its transformation. Both companies have framed the decision as the conclusion of negotiations rather than a retreat from their broader business objectives.
The episode underlines the complexity of large energy-sector combinations. Even where companies see potential strategic benefits, agreements must align on valuation, governance, assets, investment commitments and the expected path of future returns. In this case, the discussions did not produce a commercial arrangement acceptable to both sides, leaving Galp and Moeve to continue on separate paths.
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