Galp Energia

M&A Activity • Jul 28, 2016

Galp establishes a long-term partnership in natural gas infrastructure in Portugal

Galp Energia, SGPS, S.A. (Galp), through its subsidiary Galp Gas & Power, SGPS, S.A. (GGP), has reached an agreement with a consortium led by Marubeni Corporation, to establish a joint venture covering Galp's natural gas regulated infrastructure business. The consortium will acquire a 22.5% stake in the share capital of Galp Gás Natural Distribuição, S.A. (GGND), for a consideration of €138 m, and share certain governance rights within the joint venture.

Based on the agreed equity price and outstanding liabilities, the implied enterprise value for 100% of GGND is of c.€1.3 bn, equivalent to a 27% premium over the regulated asset base (RAB) and to an enterprise value multiple of 11.5x 2016 expected Ebitda.

Prior to transaction completion, GGND will raise stand-alone funding to reimburse existing shareholder loans of €568 m, leading to total cash proceeds to Galp of c.€700 m. Following completion, Galp will cease to fully consolidate GGND into its Group accounts.

This partnership is consistent with Galp's portfolio management strategy and reflects the specific nature of the regulated infrastructure business and the historically low interest rate environment, allowing Galp to crystallise value and to enhance its growth strategic options.

The transaction is subject to regulatory approval and completion is expected to take place in the fourth quarter of 2016.

Bank of America Merrill Lynch acted as exclusive financial advisor to Galp on this process.

About GGND

GGND is a holding company wholly owned by Galp, through GGP, and the leading natural gas distributor in Portugal, through nine local distribution companies that operate in different regions of the country.

This business is based on long-term concessions to provide a public service for transmission of natural gas for delivery to end consumers, through a medium and low pressure distribution network with over 12,500 km of pipelines.

About Marubeni Corporation

Marubeni is a publicly traded Japanese conglomerate engaged in a wide range of business activities and with a global presence. The group operates through five business divisions, namely Food & Consumer Products, Chemical & Forest Products, Energy & Metals, Power Projects & Plant and Transportation & Industrial Machinery.

Founded in 1858, the company is headquartered in Tokyo, and its network comprises 132 branches and offices in 67 countries across Africa, Asia-Pacific, Europe, the Americas and the Middle East.

This transaction reinforces Marubeni's presence in Portugal, where the company operates since 2013 in the power generation market and water and sewerage services.

Galp Energia, SGPS, S.A. Investor Relations:

Pedro Dias, Head Otelo Ruivo, IRO Cátia Lopes João G. Pereira João P. Pereira Teresa Rodrigues

relation to this transaction.

Contacts: Tel: +351 21 724 08 66 Fax: +351 21 724 29 65

Address: Rua Tomás da Fonseca, Torre A, 1600-209 Lisboa, Portugal Website: www.galp.com Email:investor.relations@galpenergia.com

Reuters: GALP.LS Bloomberg: GALP PL

This announcement may include forward-looking statements. Forward-looking statements are statements other than in respect of historical facts and accordingly actual events or results may differ materially from those expressed or implied by such forward-looking statements. Important factors that may cause actual results to differ from forward-looking statements are referred in the Annual Accounts Report of Galp for the year ended 31 December 2015. Galp does not intend to, and expressly disclaims any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this announcement to reflect any change in events, conditions or circumstances. Merrill Lynch International ("Bank of America Merrill Lynch"), a subsidiary of Bank of America Corporation, is acting exclusively for Galp in connection with this transaction and for no one else and will not be responsible to anyone other than Galp for providing the protections afforded to its clients or for providing advice in