Abu Dhabi is set to cash in significant gains as its Mubadala Investment pushes ahead with an initial public offering for Spanish oil firm Cepsa, in what could be the largest such deal in a decade.

The state-owned investor decided to proceed with an initial public offering (IPO)rather than a sale after potential bidders for the company were narrowed down to private equity firm Carlyle Group, people familiar with the matter said. Cepsa could announce the IPO as early as next week, pending final approval from the emirate’s rulers.

If the Spanish refiner achieves the valuation its owners anticipate, Abu Dhabi would see significant paper gains because its funds took full control of the company in 2011 in a deal valuing it at about EUR 7.5 billion.

A unit of Mubadala acquired the nearly 90-year-old Cepsa amid a push to invest in downstream industries such as oil refining to ensure future demand for crude from the UAE. The Madrid-based company is expected to list there.

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