Mubadala Is Said to Near Hiring Rothschild for Cepsa Stake Deal

(Bloomberg) -- Abu Dhabi’s financial holding company Mubadala Investment Co. is close to hiring Rothschild & Co. to help divest a stake in Cepsa Trading SA, a Spanish oil company valued at about 10 billion euros ($12 billion), according to people with knowledge of the matter.

Mubadala is also interviewing more banks for roles in assisting with a sale or initial public offering for the wholly owned asset, the people said, declining to be identified as the deliberations are confidential. The listing in Madrid would be a preferred option, they said.

Mubadala is working with Cepsa’s management “to assess a range of strategic options” including a listing, strategic partnerships and the involvement of other investors, a spokesman for the firm said in response to queries. “No final decision has been taken yet” regarding the banks, he said.

Representatives for Cepsa and Rothschild declined to comment. The Abu Dhabi firm may sell shares of Cepsa in Spain as early as this year, local daily The National reported last month, citing an interview with Musabbeh Al Kaabi, head of Mubadala’s petrochemicals and petroleum unit.

The move comes as Abu Dhabi combines two of its investment firms -- Abu Dhabi Investment Council and Mubadala -- to create a wealth fund with assets of about $250 billion, clearing the way for the oil-rich emirate to consolidate state-controlled companies and accelerate economic diversification in the United Arab Emirates. With the changes, Mubadala is poised to play a central role in the nation’s efforts to turn oil revenue into profitable investments while also attracting technology and jobs.

Investments by Mubadala, created in 2002, include Globalfoundries Inc., a California maker of semiconductors, as well as stakes in Advanced Micro Devices Inc. and in EMI Music Publishing. The company is reviewing assets after merging with another state investment vehicle last year, giving it holdings in industries ranging from aerospace and energy to infrastructure.

Cepsa, founded in 1929, was acquired by one of Abu Dhabi’s sovereign wealth funds in 2011.

The Madrid-based company, which has a large refining and petrochemicals focus, plans to boost sales to Asia, the only major region poised to see growth in the use of refined products and of the chemicals that go into consumer goods, Pedro Miro, chief executive for the oil processor known officially as Cia. Espanola de Petroleos SAU, said in an interview in Abu Dhabi in November. The company is proving to be a good fit for its owner as Middle Eastern petro-states invest in downstream industries to ensure future use of their oil.

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