Poland’s largest petrochemical company is to receive approval from the European Commission for its takeover of its smaller rival, Lotos, on condition that the merged firm divests from a jet fuel joint venture with BP, according to reports by Reuters.
The media report suggests that Orlen’s offer for its takeover target Lotos to exit a joint venture with BP, called LOTOS - Air BP Polska (LABP) will help to seal the deal. Poland’s oil giant also agreed to sell jet fuel to LABP “with the aim of creating a viable competitor.” Such moves would bring approval for a deal which would once again make Orlen, which has a 27 percent state shareholding, the largest listed company on the Warsaw stock exchange.
Orlen received treasury go-ahead to buy its 53% share of Lotos in the spring . EU competition authorities were concerned that the deal may push up prices and reduce competition in Poland, the Czech Republic, where it owns Unipetrol. Orlen is also a growing force in Lithuania, where it owns the only crude oil processing refinery in the Baltic States.
The takeover of Gdanśk-based refinery Lotos, which has a chain of 700 petrol stations nationwide, will create a monopoly in the refinery industry in Poland out of a defacto duopoly.
On the retail side, by joining forces the group will have over 2,500 petrol stations in Poland out of a total of over 7,400, according to The 2020 Polish Petroleum Organisation (POPHiN) report on the industry. Just over 40 percent of the remaining 4,900 stations are independents, while just under 20 percent are in foreign hands.