Reuters reported that Spain's Santander has agreed to sell its 32.5% share in Spanish oil company Cepsa to Abu Dhabi fund IPIC at EUR 33 per share or about EUR 2.87 billion.

As per report, Cepsa is a petrochemical and refinery group with a large service station network throughout Spain and Portugal.

The price was below the EUR 45 to EUR 55 negotiated last year when talks between Santander and IPIC over Spain's second largest oil company failed but was in line with recent reports of a EUR 30 to EUR 35 band.

Spanish power firm Union Fenosa sold its 5% in Cepsa as part of Santander's agreement with IPIC and under the same terms. Fenosa had given Santander a mandate to bundle its holding with the bank's as both sought to divest non-core assets.

Mr Alfredo Saenz CEO of Santander said that “The holding in Cepsa was the last of a series of industrial stakes Banco Santander has sold in recent years in order to focus exclusively on its core retail and commercial banking activities.”

He said that IPIC will become Cepsa's second largest shareholder with approximately 47% after France's Total following the deal, which is subject to regulatory approval and financing.

Santander said that the final price of the offer will be lower to reflect the dividends that Cepsa could pay in 2009, while adding that the exclusion of Cepsa from its books would not have any impact on its bottom line.

(Sourced from Reuters)