Galp Energia shares fall 8.6% after Moeve merger talks collapse

what happened

According to Dow Jones Newswires, shares of Portugal's Galp Energia fell 8.6% in morning trade, to 20.99 euros, although they are still up nearly 44% year to date. The drop followed the collapse of talks with Moeve on combining their downstream operations. The two companies, owned by Mubadala Investment Company and Carlyle Group, signed a nonbinding agreement in January and aimed for a final deal by mid-2026, but on Monday they said they could not agree on commercial terms. Galp said the strategic case for a combination still holds.

Galp's third-quarter results beat expectations, and the company raised its outlook. It now expects adjusted replacement-cost EBITDA of about 5 billion euros, up from around 4 billion, and adjusted operating cash flow of about 3.9 billion euros, versus around 3 billion previously. Quarterly adjusted replacement-cost net profit reached 682 million euros, compared with 407 million a year earlier. The company also now assumes Brent averages $90 a barrel for the full year, up from $80, and a full-year refining margin of about $25 a barrel of oil equivalent, from $13.

why it matters

RBC Capital Markets analyst Biraj Borkhataria said investors had expected a deal in early fourth quarter. He wrote that a combination could have made Galp a more attractive takeover target, and that without it the company's premium valuation relative to peers could be questioned. The higher Brent assumption is also a signal for the oil and refining market.

market impact

Galp Energia: failed deal weighs on the shares, while higher guidance supports fundamentals; Brent: company's higher price assumption

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