14,000 million, cost to Spain to calm the Gulf fever over our energy

The Spanish state returns to the stake in Telefónica, where it will soon will reach his goal of owning 10% of the company via SEPI. A strategic step in connection with the entry of Saudi Telecom Company into the operator (STC) in September 2023 with the purchase of 9.9% of its capital.

In December, the Council of Ministers decided that Telefonica’s public presence would resume after more than two decades of absence from the company (with a wave of government privatizations Jose Maria Aznar) to receive 10% of this amount via SEPI. The strategic nature of the national security and defense operator was key to the government’s decision to invest in Telefónica.

For the same reason, whether or not the state should participate in the Spanish energy companies listed on Ibex and in which they are particularly active. interested Gulf countries? Taking the acquisition of 10% of Telefónica as a basis, calculating the investments that the state will need to be present in four major energy companies (Endesa, Naturgy, Repsol and Iberdrola) will add up to an approximate figure 14,000 million euros.

The state is already present as a shareholder in Ibex 35 companies: Aena (with 51% through the Enaire group), Caixabank (with 17% through Frob after takeover of nationalized Bankia), Redeya (with 20%), Indra (with 28%), IAG (with an almost paltry 2.52% compared to the rest) and Enagas (with 5%). In the last four cases, state participation is carried out through the State Society for Industrial Participation (SEPI). depends on the Ministry of Finance and whose purpose is to manage government-owned business interests.

Interest of countries Persian Gulf from Ibex rises. This is evidenced by his recent movements and forecasts for the future. Sovereign funds Qatar and United Arab Emirates They targeted companies that the Spanish government calls “strategic.” Except tourism, telecommunications and energy These are other business sectors in which they are already active.

Its main goal, as noted by experts, is “to gain the knowledge that Spanish energy companies have in this area”, paying particular attention to “renewable energy sources” in which Spain is the leading country in terms of research and development. “They have the sun, we have the knowledge,” the economist adds. Ignacio Muro.

Abu Dhabi looks to Naturgy

According to the input example Saudi Arabia in Telefonica, peephole United Arab Emirates turned to Naturgywith likely direct government intervention Abu Dhabi in the authorized capital of a Spanish energy company through TakaAbu Dhabi National Energy Company (PAC).

The cost of entry of the Spanish state into Naturgy will be 2.4 billion euros (Using Endesa’s market capitalization as of May 17, 2024 as a guide). The main shareholders of the electricity company at the moment are: Fundación la Caixa with a share of 27%, Rioja Bidco Shareholdings, SLU (Rioja), a company controlled by funds advised by CVC, which own 20.90%. Also Global Infrastructure Management, LLC, recently acquired by BlackRock, Inc. with a 20.80% stake, and IFM Investors Pty Ltd, representing 15.20% of Naturgy’s total shares.

The largest shareholder of Iberdrola is from Qatar.

State entry into Iberdrola will cost approximately 7.9 billion euros to the state treasury. This would represent the largest cost among the four companies, as it is the energy company with the highest value on the stock market (worth more than the other three combined). Although experts do not consider the presence of the state in this particular company “necessary.” Although his project is global, his ownership still remains “essentially Spanish” as well as “their values,” Muro says. The guarantee, according to this economist, is that protecting the interests of Spainthrough energy, insured.

In a stake in the company chaired by Ignacio Sanchez Galan Investment group Qatar Holding LLC is present with 9% (largest shareholder), another 5.21% belongs to BlackRock, Inc. and in the top three most influential investors, Iberdrola does not reach 9%.

Endesa, controlled by an Italian state company

On the other side of the coin is Endesa. This is the main company that economists will bet on to get their property back. Participation “should recover,” he notes. Julio Rodriguezfrom Economists Without Borders, about Endesa, which emphasizes that “it should never have been privatized”.

An operation to restore part of control over the company, with the acquisition of 10% of its sharewill have an approximate value of €1,900 million (based on Endesa’s market capitalization as of May 17, 2024).

The privatization process of Endesa, founded as Empresa Nacional de Electricidad, SA to operate in the electricity and gas sectors, began with a mandate Felipe Gonzalez and ended in 1998, when the government Jose Maria Aznar sold the company’s last public shares.

Almost ten years later, in 2007, the Italian In that (Ente Nazionale per l’Energia Elettrica) became a shareholder in Endesa after maneuvers by the Aznar government, which did not welcome the purchase of the electricity company by the Catalan company. Natural gas (its later merger with Unión Fenosa led to the creation of the current Naturgy).

The takeover bid submitted by Enel for the then leading Spanish electricity company was considered. “one of the most expensive operations in European economic history”, experts say. Thus, a state-owned company passed from the hands of the Spanish government to the ownership of another state, which many experts and economists describe as “absurd”.

Enel, the Italian state-owned electricity company, took advantage of the fact that it had 92% of your control “break up” the Spanish electricity company, distributing profits of 14.6 billion euros among its shareholders and take all his Latin American assets. The Italian company controls 70% of Endesa’s shares, which are worth an estimated $13.5 billion. BlackRock, Inc., Thornburg Investment Management, Inc. and The Vanguard Group, Inc. (the world’s largest investment fund company), They own just over 5% of the power company’s shares.

Oil company Repsol now looks to renewables

Repsol, an oil company that is taking an important step towards clean energy and is focused on the future of its business, valued its subsidiary Repsol Renovables at approximately 5.9 billion euros.faced with the possible sale of a “minority” stake to a bidder whose identity is unknown.

According to information obtained by Reuters, Repsol is in talks to sell a minority stake in its renewable energy subsidiary to help finance its strategic plan until 2027, although its intention is to retain more than 50% of businessindicate sources close to the company.

Its seven major shareholders control approximately 23% of the business, with BlackRock, Inc. is the investment group that stands out the most. with ownership of 5% shares. The cost of the Spanish state entering the shareholders’ quadrant with 10% shares, placing itself well above the rest, would mean: payment of almost 1.8 billion euros (Using Endesa’s market capitalization as of May 17, 2024 as a guide).

Nationalization of strategic companies – a trend of the future

States are following the path of nationalization, mainly of companies considered strategic for any country: agri-food, energy, finance and defense. A trend that started with the changing scenario that the whole world experienced after the outbreak of the epidemic 2008 crisiswhich entailed a change in roles between the major economic powers with the advent of new aspiring actor, Chinawhich has not stopped growing since then.

Beginning in the middle of the next decade, nationalization movements promoted by the two main Anglo-Saxon powers USA with the government Donald TrumpAnd Great Britain with his departure from European Union (Brexit)further marked a growing trend towards protecting “home” companies or restoring at least the ability to influence those that have been privatized and, as in the case of Spain, in some cases completely lost control (Endesa).

The pandemic has shown in black and white the consequences of a lack of “control.” in areas such as health (production of masks or vaccines). The first years of the current decade continued to strengthen this type of new nationalism, which had a noticeable impact on the politics and social organization of Spanish countries with the emergence of political parties. far right like Voxand their counterparts in other EU countries.

In economics, nationalization is aimed, as experts explain, at trying to restore the influence of the state in the economy. strategic companieseither directly when buying shares, or indirectly through hardcore, like SEPI.