The European Commission competition watchdog gives the green light for Orlen to take over smaller Gdańsk-based rival Lotos but insist on the sell-off of 80 percent of the refinery’s petrol stations and 30 percent of its refining capacity.
Two years after a letter of intent was signed for energy giant Orlen, the final response of the competition watchdog was given for the takeover, which on paper will create a company which is worth PLN 65.5 bn (EUR 14.6 bn), making it number 410 on the Fortune 500, according to Business Insider’s calculation. The sell-off of nearly 400 Lotos petrol stations will decrease that value however.
“The fact is that you can’t have petrol stations standing right next to each other,” Daniel Obajtek, the Chairman of Orlen told a press conference at the Polish Ministry of State Assets on Tuesday, explaining the difficulties of the negotiations for both Orlen and the EC.
“We are negotiating with our partners, and we are agreeing that this won’t be a sale of stations but an exchange for stations in other countries,” said Mr Obajtek, who also explained the impossibility of holding on to all of Lotos’s assets, which would give the company a monopoly on the supply of refinery products in Poland to add to its existing monopoly in Lithuania and the Czech Republic, after its takeover of Możejki refinery and Unipetrol.
In addition Orlen currently has 586 petrol stations in Germany, 415 in the Czech Republic and 10 in Slovakia.
Back in January the Hungarian oil firm MOL, which is also the owner of the largest chain of petrol stations in Slovakia was rumoured to be talking to Orlen about possibly buying Lotos stations, according to Business Alert. An exchange which would give Poland a larger share of the Slovak market may be what is envisaged.
The split-up of the Lotos group would be a blow to the Baltic Tri-City, where it currently is the largest local tax payer and the largest employer.
Looking at the strategy of the group to become a multi-energy player, however, with interests in hydrogen, wind power and gas power stations, a company which is slightly leaner on petrol stations, heavier on refining and green energy may be better positioned to compete on the European stage.
Orlen management have given no specific denial to questions by Business Insider about the possibility of further takeovers in the energy space and say there is only room for one multi-energy player in Poland. Analysts are pondering whether an Orlen-PGNiG merger may be the next move for Orlen, after its spring takeover of power generator, Energa.