BRITISH GAS CONSOLIDATING POSITION IN SPAIN

In Spain, British Gas plc has sold its interests in one of the key Spanish gas companies in exchange for a 50% stake in the engineering and service units of Spain's new state gas company Gas Natural. The BG deal consolidates the company's position in one of the fastest growing gas markets in Europe while acknowledging the Spanish government's dislike of a direct foreign shareholding in the new national gas company.

Dec. 16, 1991

2 min read

In Spain, British Gas plc has sold its interests in one of the key Spanish gas companies in exchange for a 50% stake in the engineering and service units of Spain's new state gas company Gas Natural.

The BG deal consolidates the company's position in one of the fastest growing gas markets in Europe while acknowledging the Spanish government's dislike of a direct foreign shareholding in the new national gas company.

BG moved into the Spanish gas industry by taking a 10.1% stake in Catalana de Gas, the influential Barcelona utility that merged with Repsol SA's gas interests to form GN. Through Catalana, BG had about a 7.1% stake in the new company prior to the new deal.

Under the deal, BG agreed to sell its 10.1% stake in Catalana to the other main shareholders, Repsol and La Caixa, at a premium over market prices for 73 million ($129 million). Further, BG purchased its interest in GN for 100 million ($177 million), a 10 million premium over the market price.

At the same time BG and GN created a joint holding company that will wholly own GN's engineering and service units. BG also signed a collaboration agreement, covering an initial term of 5 years, covering technical and commercial activities worth a minimum of 300,000 ($531,000).