Total sells stake in Spain's CEPSA to UAE's IPIC for $5.2B

By Phaedra Friend Troy

French major Total (NYSE:TOT) has confirmed the sale of 48.83 percent in Compania Espanola de Petroleos SA, or CEPSA, to IPIC for €3.7 billion (US $5.2 billion).

Wholly owned by the United Arab Emirates government, IPIC, or International Petroleum Investment Company, launched a takeover bid for the Spanish oil company at a price of €28 (US $40) per share. 

As Spain's second-largest oil company, CEPSA is an integrated energy company that focuses mostly on refining crude oil and marketing, with a refining capacity of 528,000 barrels of oil a day, as well as a retail network of about 1,750 service stations in Spain and Portugal. CEPSA also produces about 55,000 barrels of oil equivalent a day and is active in petrochemicals, natural gas marketing and power.

IPIC held 47.06 percent in CEPSA before the company launched the takeover bid. Total received €3.7 billion (US $5.2B) for its shares on July 29, 2011. Approved by the CEPSA board of directors, those shareholders who did not tender their shares in the offer will be required to sell through a squeeze-out.

Once IPIC is the owner of 100 percent of CEPSA's shares, the company will automatically be de-listed from Spanish stock exchanges.

The sale is in-line with the French firm's strategy to divest its European refining assets. Since 2007, Total has reduced its exposure to European refining by 25 percent, or 550,000 barrels of oil a day. Total is retaining is lubricant, specialty products and chemical operations in Spain.

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