1. M & A Advantages Geographical Difersification
YPF would deepen Repsol’s business base in Argentina and give it a material presence in other Latin America Country
Business Difersification
Repsol’s activities were concentrated in the “down-stream” segment of the oil industry : refining and marketing. YPF had a subtantial presence in explorattion and production also activity in natural gas.
Acquisition of Reserves
The transaction would convey YPF’s substantial reserves at relatively low average price
Competitive Preemption
Acquiring this dominant competitor in Latin America would deny other oil companies access to this market. YPF had strong brand in Latin America.
Critical Mass
The transaction would elevate Repsol in the league tables of intergated oil companies

2. Repsol Strategic Objectives
Grow Upstream
YPF would strengthen Repsol’s upstream business : oil and gas reserves would grow by more than four times.
Expand Internationally
YPF would triples Repsol’s presence in Latin America with 50 percent of the new group’s total assets
Diversify into gas/power generation
YPF would raise gas production eightfold
Retain Domestic Market Share
YPF’s acquisition would complement Repsol’s dominance in the Spanish market.

3. Other Advantages Synergies Financial Effects of the Combination
Form of Payment

4. Financing a Posible Cash Bid
Financing with Debt
Financing with an Issue of Common Equity
Cash offer with a mix of Debt and Equity