The Spanish government said Tuesday it has approved Australian fund IFM's partial takeover bid for energy group Naturgy on the condition that it maintain its activity in Spain.
IFM in January offered five billion euros ($6 billion) for a 22.7 percent stake in Naturgy in an unsolicited bid and the government had been assessing whether to allow the transaction to go ahead.
Naturgy owns a 49 percent stake in the Medgaz pipeline, which carries natural gas from Algeria to Spain. Algeria is Spain's main natural gas supplier.
"The main objective of the conditions set is to protect the public interest through the maintenance of (Naturgy's) headquarters and activity in Spain," the Spanish economy ministry said in a statement.
IFM will also have to "guarantee prudent financial management", maintain investments in green anergy and ensure that a "significant" number of the company's jobs in Spain are maintained, it added.
Under new rules introduced in March 2020 by Prime Minister Pedro Sanchez's leftist government, foreign firms seeking to buy more than 10 percent of a Spanish firm deemed "strategic" must obtain the green light from the cabinet.
IFM must now seek approval for its partial takeover bid from Spain's stock market regulator.
A longtime major producer and trader of natural gas, Naturgy is trying to shift to renewable energy that governments across the world hope will reduce their dependence on planet-warming fossil fuels.
It has invested in wind and solar power in Spain, Australia and Chile.