PKN ORLEN has filed a formal application for the European Commission’s approval of its proposed acquisition of LOTOS Group. The completion of the process would result in a single strong internally integrated entity with international potential, whose position in the oil supply market would be even more prominent.
“In business, scale matters. This rule of thumb is understood by all major European and global players in the fuel and energy business, who have long since gone through their own consolidation efforts. A single strong entity would be well-placed to successfully compete in a demanding market, lend greater stability to the national economy, also in fuel prices, and ramp up its own growth-oriented investments. We have taken up this challenge seeing the merger as a requisite driver of the business future of the combined companies, their shareholder value and energy security of Poland, serving the interests of both retail customers and local communities. Smooth execution of the process is a priority for us, the formal application we have just submitted to the European Commission best showing how determined and effective we are in its pursuit,” says Daniel Obajtek, President of the Management Board of PKN ORLEN.
PKN ORLEN’s application includes, the proposed concept of the transaction, overview of the parties’ activities in certain relevant markets, and arguments concerning the merger’s impact on competition in those markets. It is accompanied by a package of internal documents of both companies, which are to allow the European Commission to review the validity of PKN ORLEN’s case.
The acquisition of LOTOS Group by PKN ORLEN was initiated in February 2018 by signing a Letter of Intent with the Polish State Treasury, holding 53.19% of voting rights at the General Meeting of LOTOS Group. The letter outlined the transaction structure. In the first stage, PKN ORLEN would acquire 32.99% of LOTOS Group shares from the State Treasury. Next, a tender offer for shares representing up to 66% of total voting rights at the General Meeting of LOTOS Group would have to be announced.