President Donald Trump’s executive order on January 20, 2026, formally derecognizing Nicolás Maduro as Venezuela’s leader has injected fresh uncertainty into Elliott Investment Management’s $12.3 billion acquisition of Citgo Petroleum’s parent company. The move accelerates U.S. efforts to dismantle the Maduro regime but risks derailing one of private equity’s largest distressed energy deals, as creditors and regulators reassess control over Venezuela’s most valuable overseas asset.
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Deal Background and Financial Terms
Elliott, alongside partners such as Golding Capital Partners and RRJ Capital, agreed in November 2025 to purchase Citgo Holding—a Delaware-incorporated entity owning the U.S.-based refiner—from a creditor steering committee for $12.3 billion. The transaction resolves years of litigation stemming from $20 billion-plus in claims against Venezuela’s state-owned PDVSA, Citgo’s ultimate parent.
| Metric | Amount |
|---|---|
| Purchase Price | $12.3 billion |
| Total PDVSA Claims Settled | $21.3 billion |
| Citgo EBITDA (2025 est.) | $2.8 billion |
| Implied EV/EBITDA Multiple | 4.4x |
The deal, approved by a U.S. Delaware court in December 2025, priced Citgo at a 4.4x EV/EBITDA multiple—attractive for a refiner with 807,000 barrels-per-day capacity and key assets in Illinois, Louisiana, and New Jersey. Closing was targeted for Q1 2026, subject to U.S. Treasury’s Office of Foreign Assets Control (OFAC) license.
Impact of Trump’s Maduro Derecognition
Trump’s order recognizes opposition leader Edmundo González Urrutia as Venezuela’s interim president, directing U.S. agencies to unwind sanctions tied to Maduro’s control. Citgo shares, previously seized as collateral for PDVSA bonds, fall under this umbrella. Sources close to the deal indicate Elliott is seeking clarity on whether the OFAC license—critical for transferring shares—remains valid amid the shift.
“This upends the asset’s chain of title,” said a Kirkland & Ellis partner advising energy creditors, noting parallels to 2019’s failed Crystallex auction when Maduro loyalists contested U.S. court orders. Goldman Sachs analysts estimate a 40% probability of deal delay past March 2026, citing regulatory review under the new framework.
Strategic Rationale and Industry Implications
For Elliott, the Citgo bid fits its playbook of opportunistic energy investments, akin to its $2.3 billion purchase of BP’s U.S. shale assets in 2024. Synergies include operational efficiencies at Citgo’s Corpus Christi refinery and exposure to U.S. Gulf Coast crack spreads, projected at $15-$20 per barrel in 2026 per BP’s outlook.
Broader distressed asset strategies in energy face headwinds. Bain & Company’s 2026 M&A report highlights rising geopolitical risks in cross-border deals involving sanctioned regimes, with 25% of Latin America energy transactions delayed in 2025. Similar cases include Oaktree Capital’s stalled $1.2 billion ConocoPhillips Venezuela claim settlement.
- Upside Risks: González recognition could unlock PDVSA dividends, adding $1 billion annually to Citgo’s value (McKinsey estimate).
- Downside Risks: Maduro retaliation via asset freezes; potential U.S. court reversal if Venezuelan opposition fails to consolidate power.
- Valuation Sensitivity: At 5x EBITDA, Citgo’s enterprise value hits $14 billion; refiners trade at 6.2x median (S&P Global data).
Historical Precedents and Private Equity Playbook
This echoes Elliott’s activism in Argentina’s YPF litigation, where it recovered $16 billion in 2025 through U.S. court attachments. KKR’s head of energy PE noted at Davos 2026 that such deals underscore private equity exit strategies in sanctioned energy assets, emphasizing OFAC navigation and local stakeholder alignment.
Should the deal collapse, auction alternatives could emerge, with bidders like Apollo Global Management circling. For now, C-level executives tracking geopolitical M&A trends should monitor OFAC updates and Venezuelan court filings for signals on Citgo’s path forward.
Sources
