CVC in negotiations with Repsol

Spanish petrochemicals group Repsol YPF is finalising a deal with CVC Capital Partners to put forward a joint bid for Shell Gas, the liquefied petroleum gas (LPG) division of UK-Dutch oil group Royal Dutch/Shell. According to the financial newspaper Expansion, Repsol will merge its own butane gas division, valued at E2.1bn, with that of Shell Gas, while CVC will contribute E2.5bn of funding, roughly the value of Shell Gas. The resulting group will be worth E4.6bn, and will be the world's biggest LPG group, with annual sales of 7.3 million tonnes of LPG (butane and propane). The report also suggests that Repsol, which would be responsible for running the new company, could have an option to buy out CVC's 60% share after around five years, and that the new company might eventually be floated on the stock market. However, both groups are not without competition. Investment funds like Apax, Blackstone and Charterhouse are also reported to be negotiating with Repsol, while French oil groups Primagaz and Total have expressed an interest in acquiring Shell Gas.

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• Southern Europe