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Case
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Reference no. P90C
Published by: Stanford Business School
Originally published in: 2017
Version: 12 April 2017
Revision date: 31-May-2017

Abstract

This is part of a case series. Back in 1999, the Spanish oil company Repsol purchased 98 percent of the Argentine oil company YPF's shares for more than USD15 billion and changed its name to Repsol-YPF. At the time, the New York Times said the deal 'appears to be a perfect marriage' and asked, 'Repsol-YPF: As Good as It Gets?' However, on April 16, 2012, that 'perfect marriage' was effectively annulled when Argentine president Cristina Fernandez de Kirchner announced that her government was expropriating YPF. 'The model chosen for the future of YPF is not nationalization,' said Fernandez, 'but recovery of sovereignty and control of hydrocarbons.' This case explores, in three parts, the background to the expropriation of YPF; the responses considered by Repsol; and Repsol's ultimate decision to fight the expropriation, which resulted in its receiving USD5 billion in guaranteed bonds from the Argentine government.

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Abstract

This is part of a case series. Back in 1999, the Spanish oil company Repsol purchased 98 percent of the Argentine oil company YPF's shares for more than USD15 billion and changed its name to Repsol-YPF. At the time, the New York Times said the deal 'appears to be a perfect marriage' and asked, 'Repsol-YPF: As Good as It Gets?' However, on April 16, 2012, that 'perfect marriage' was effectively annulled when Argentine president Cristina Fernandez de Kirchner announced that her government was expropriating YPF. 'The model chosen for the future of YPF is not nationalization,' said Fernandez, 'but recovery of sovereignty and control of hydrocarbons.' This case explores, in three parts, the background to the expropriation of YPF; the responses considered by Repsol; and Repsol's ultimate decision to fight the expropriation, which resulted in its receiving USD5 billion in guaranteed bonds from the Argentine government.

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