Repsol - YPF: An "Illegal" Expropriation: The Spanish Point of View

On April 17, 2012, the Argentinian government decided to expropriate the largest company in Argentina. The country's president, Cristina Fernández de Kirchner, invited like-minded governors and business leaders to the Casa Rosada, where she announced that the state was declaring 51% of the shares belonging to Repsol-YPF as the public's property and subject to expropriation. The dispute over compensation will not have a diplomatic solution, despite the strong cultural and commercial ties that historically bind these two countries. Whereas discussion of the case focuses on the dispute over an expropriation that some consider illegal and others see as necessary, the lessons based on the case are not only centered on the causes defended by the Argentinian government and the strategic and economic damage suffered by Repsol. They also touch on the dilemmas for the Spanish government and the expectations for Spanish companies that are already established in Argentina, in a climate of complete uncertainty. The main objective of this case is to analyze two topics, based on the issues raised in the case study: - On the one hand, an international investor's positioning when deciding to enter a country. - On the other hand, the key decisions that governments can make to attract FDI. The methodology we propose is to hand out the "Argentinian" version of the case to half of the participants, and the "Spanish" version to the other half, as the basis for individual and group study.