The government requires BlackRock not to take Naturgy private, not to sell its networks and to keep its headquarters and most of its employees in Spain.

The government allowed BlackRock, the world’s largest fund manager, to enter Naturgy as one of its major shareholders. Last September, the Council of Ministers approved the request of the firm led by Larry Fink to acquire the GIP fund, which is one of the main partners of the Spanish energy company with 20.6% of the capital (later it turned out that it already controls 20.9% after combining the stakes of both companies). BlackRock officially closed the operation on October 1, but to do so it had to accept a number of obligations imposed by the Spanish government.

The terms for Naturgy’s second-largest shareholder, second only to Criteria (with 26.7%), are the same ones that the government had already imposed on Australia’s IFM fund three years ago to sanction its partial takeover bid. obtain a stake in a Spanish energy company, but extend its term. Terms from the inability to remove Naturgy from the Spanish stock market in order to keep the headquarters and most of the jobs in Spain.

and also do not promote the sale of business in the field of electricity and gas supply companies or to promote investments related to the energy transition.

Requirements from 3 to 5 years

BlackRock has committed not to promote or sponsor any proposal to delist Naturgy shares from trading on the Spanish stock exchanges. for the next three years, as confirmed by the fund manager of the National Securities Market Commission (CNMV). Corporate, labor, financial and investment requirements will last even longer.

The government is forcing BlackRock to retain a “significant portion” of the group’s workforce in Spain for five years, and not move its registered office or operating headquarters. management and management of business outside the country. The executive branch also requires reasonable dividend policy, debt policy, which serves to maintain an investment grade credit rating. and that the debt ratios of its regulated subsidiaries (especially the electricity and gas networks) are no higher than those recommended by the National Markets and Competition Commission (CNMC).

Blackrock has also committed to obtaining approval from the Spanish government for the operation,”support Naturgy’s investments in projects related to the energy transition in Spain that contribute to long-term value creation, are sustainable and adapt to market standards in terms of profitability and risk profile.”

Larry Fink’s management company will not present to the board of directors or general meeting of shareholders of Naturgy, and will not promote or sponsor any proposals for the sale of assets other than those reflected in Naturgy’s strategic plan and which involve “loss of control over subsidiaries Naturgy, which could jeopardize the proper functioning of the transmission and distribution activities of electricity and natural gas in Spain”, that is, its electricity and gas networks in the national market.

Share of movements

GIP, now controlled by BlackRock, and CVC fund (another major shareholder with a 20.7% stake in the energy company) were in talks to sell their stakes in Naturgy to energy group Taqa, controlled by Abu Dhabi’s sovereign wealth fund, but the deal fell through. and for now they remain shareholders of the energy company.

Following the failed takeover bid prepared by Abu Dhabi, Criteria – the investment arm of Fundación LaCaixa and Naturgy’s largest shareholder – is looking for ways to provide stability to the energy company’s shareholders in the event of the departure of other partners; IFM continues to strengthen the group’s capital, currently controlling 16%, and the company’s management is completing the presentation of a new strategic plan to grow and strengthen its value.

Shield for strategic companies

The executive branch has been analyzing since January last year BlackRock’s takeover of GIP due to its implications for a strategic sector such as energy

and determine the extent to which it was affected by the “anti-takeover shield” protections put in place by the government during the pandemic to protect companies in strategic sectors such as energy from purchases by foreign investors.

Since BlackRock announced its agreement to buy GIP for $12.5 billion, the operation has already become the subject of political controversy in Spain, as well as within the progressive coalition government itself. And that’s what Sumar (also Podemos) publicly demanded that the executive prevent giant BlackRock from taking control of 20% of Naturgy.. Demands that were not met by the government’s economic team led by the PSOE.