Naturgy and Sonatrach to acquire a 42% stake in Medgaz pipeline from Mubadala for for $880m.

Naturgy, which provides gas and electricity, and Sonatrach, the owner, and operator of the gas pipeline in Algeria, both agreed to acquire a 42% stake in Medgaz pipeline from Mubadala, an Abu Dabi investment firm, for $880m. Naturgy will pay €445m ($490m) to Mubadala for a 34% stake and structure the deal through a special purpose vehicle, while Sonatrach is bidding for the other 8%. The operation will allow Naturgy to transform its current 15% stake in Medgaz, from being a financial investment with very limited government rights to a strategic stake that will allow joint control of the company along with Sonatrach. “As a whole, it is a very attractive operation for Naturgy, both because it is a strategic infrastructure asset, where we increase our control position significantly, as well as the financial terms reached in the agreement, which represent an attractive price for stable dividends and Long-term predictable that meet our criteria for generating shareholder value,” Francisco Reynés, President of Naturgy.