TAQA Revives Bid for Spain’s Naturgy Amid Spanish Hesitation and Algerian Concern
The UAE’s state-owned energy giant renews acquisition talks with Naturgy’s top shareholder, raising geopolitical tension with Algeria and questions over Spain’s energy sovereignty.
Watan-On Monday, sources familiar with the matter revealed that Abu Dhabi National Energy Company (TAQA) has renewed its communication with CriteriaCaixa, the largest shareholder in Naturgy, Spain’s biggest gas company.
UAE Investment Minister Mohamed Hassan Al Suwaidi, who also chairs TAQA, reportedly traveled to Spain to meet with an executive from CriteriaCaixa to discuss a potential deal.
TAQA declined to comment when asked on Tuesday.
According to the sources, Criteria remains open to discussions as long as TAQA does not seek a majority stake in Naturgy, and the move does not trigger diplomatic tensions with Algeria, where Naturgy has significant operations.
Naturgy Deal Raises Energy and Diplomatic Stakes
Data compiled by the London Stock Exchange Group shows that Criteria is the main shareholder in CaixaBank and holds a 26.7% stake in Naturgy.
Both Naturgy and Criteria declined to comment on Monday.
Last year, TAQA attempted to acquire Criteria’s 26.7% stake in Naturgy through a potential partnership agreement but failed to reach a deal.
Earlier in the year, Algeria warned it would halt gas shipments to Naturgy if the Spanish company sold its shares to another party.
This warning followed TAQA’s confirmation that it was in talks with Naturgy’s three largest shareholders, which could lead to a full acquisition of Spain’s leading natural gas company.
Naturgy owns a stake in a major pipeline between Spain and Algeria and holds key contracts with Algeria’s Sonatrach, which supplies gas to Spain through the pipeline. Naturgy also has a long-term contract to import around 3 billion cubic meters of Russian liquefied natural gas (LNG) annually.
A company spokesperson said:“Naturgy has signed contracts for either gas supply or penalties for failure to import until 2032 with Algeria.”
He added that Naturgy is not involved in any negotiations concerning its ownership, according to disclosures at the time.
Last year, TAQA said it was holding discussions with two private equity firms—CVC and GIP—which each hold more than 20% of Naturgy’s shares—regarding acquiring their stakes.
TAQA also confirmed talks with Criteria, Naturgy’s largest shareholder with a 26.7% stake, about a potential partnership agreement.
The Abu Dhabi-owned TAQA had expressed interest in acquiring full control of Naturgy, Spain’s largest gas supplier and third-largest electricity provider, aiming to replicate its previous bid to acquire CEPSA, the Spanish oil company.
Spanish Hesitancy and Algerian Concerns
Spain’s hesitation and Algeria’s concern stem from the fact that Naturgy owns 49% of the Medgaz pipeline, which transports Algerian gas to Spain and Portugal—while Algeria holds the remaining 51%.
Last year, the Spanish Cabinet approved an agreement with the UAE to protect bilateral investments and facilitate mutual investments. Some media outlets interpreted this as paving the way for TAQA to acquire Naturgy in a deal estimated between $22 billion and $26 billion.
However, the main obstacle remains political. Naturgy is the fifth-largest listed company on the Madrid Stock Exchange, valued at over €24 billion, and plays a strategic role in Spain’s energy security. Therefore, any acquisition requires the Spanish government’s approval.
A report by El Periódico de Catalunya noted the government’s preference that Naturgy remain in Spanish hands rather than be owned by a foreign investor.
Madrid has also considered Algeria’s position. Algeria is opposed to UAE involvement in Naturgy’s capital—particularly given the tense relations between Algiers and Abu Dhabi. The UAE is also seen as a close ally of Morocco, Algeria’s western neighbor, with whom it has had a deepening diplomatic crisis in recent years. That crisis peaked when Algeria severed ties with Morocco.
Last year, Spanish newspaper El Confidencial described the UAE’s move as a strategic maneuver aimed at benefiting Morocco, potentially allowing it to secure future gas supplies through Naturgy—should it fall under UAE control. The report claimed a briefing was even submitted to the Spanish Prime Minister’s office on the matter.
Algeria’s contracts with Spanish companies stipulate that Algerian gas cannot be resold to third parties without prior approval.
Currently, Spain purchases gas from international markets on behalf of Morocco, under the condition that none of it originates from Algeria. Spain then re-exports this gas to Morocco via the Maghreb-Europe pipeline, which runs through Morocco and connects Spain with Algeria—before Algeria shut it down.
