On Tuesday, the government agreed to merge the companies of Grupa Lotos and Polski Koncern Naftowy Orlen. The merger of the two companies will be part of the consolidation process of the Polish fuel and energy sector companies including Orlen, Lotos and Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) – the Chancellery of the Prime Minister informed on Tuesday. The terms of the merger, inter alia, with the Hungarian MOL and Saudi Aramco, are controversial.
the Council of Ministers accepted the application for consent to the merger of Grupa Lotos based in Gdańsk and Polski Koncern Naftowy Orlen based in Płock, submitted by the Minister of State Assets – the Chancellery of the Prime Minister announced in the announcement.
Merger of PKN Orlen, Lotos and PGNiG
“The merger of both companies will be an element of the consolidation process of the Polish fuel and energy sector companies including Orlen, Lotos and Polskie Górnictwo Naftowe i Gazownictwo (PGNiG). PKN Orlen will play a leading role in this process. The solution will contribute to the improvement of the energy security of Poland and the region, which it is particularly important in the current geopolitical situation “- it was announced in the press release.
It added that the ongoing energy transformation in the world poses a great challenge for companies in the fuel and energy sector, as it assumes a gradual departure from hydrocarbons and conventional fuels in favor of new and more sustainable energy sources. “As a consequence, companies in the sector are forced to look for new, promising business areas that will be able to guarantee them the possibility of long-term development” – it was written in the release.
It was emphasized that “the merger of Grupa Lotos with PKN Orlen will enable the improvement of operational efficiency in the current areas of activity, such as mining and refining production. This solution will increase work efficiency and contribute to the improvement of energy security in Poland and the region”.
It was also added that in the future, thanks to the consolidation of the fuel and energy sector, a strong Polish multi-energy concern will be created, with the leading role of PKN Orlen. Using the synergy effect, it will be able to meet the challenges of the energy transformation and compete on the market with European and global companies. “The new concern will become the largest company in Central and Eastern Europe” – it was noted.
Opponents of the merger
“We speak out unanimously and unequivocally against the implementation of the so-called merger of the LOTOS group with the Orlen group on the terms announced by the Minister of State Assets,” former economic ministers wrote in a joint position in mid-May. The signatories of the letter appeal, inter alia, for the cessation of the sale of Lotos assets and for the Hungarian fuel concern not to enter the Polish market.
The letter was signed by former ministers of industry and trade, including: Tadeusz Syryjczyk, Henryka Bochniarz, Andrzej Lipko and Marek Pol. The signatories of the appeal are also former heads of the Ministry of Economy: Wiesław Kaczmarek, Janusz Steinhoff, Jacek Piechota, Jerzy Hausner, Piotr Woźniak, Waldemar Pawlak and Janusz Piechociński.
Former ministers appeal to “stop the partitioning procedures of the LOTOS group, opting to keep it in the current, integrated structure.” “We especially call for the maintenance of the ownership structure of the network of petrol stations that compete with the network of stations of the Orlen group,” we read.
“The attempt to include selected assets of LOTOS SA into the Hungarian MOL group in exchange for its selected assets intended for inclusion in the Orlen group is an attempt at a non-equivalent exchange (the so-called swap) and exhausts all the hallmarks of defective privatization, to the detriment of the country’s energy security, for the treasury the state and for Grupa LOTOS SA The lack of security against further disposal by MOL and Saudi Aramco of the planned acquisition of LOTOS SA’s assets indicates an exceptional economic ignorance in the face of such a significant value of assets (especially retail) for potential new buyers from strong Russian capital groups “- it was written.
Orlen fusion with Lotos
According to the announced in mid-January this year. according to PKN Orlen’s decisions, Saudi Aramco is to buy 30 percent. shares in the Lotos refinery, Hungarian MOL – 417 Lotos service stations, and Unimot – fuel depots. In this way, PKN Orlen meets the conditions for the takeover of Lotos, set by the European Commission. At the same time, the concern signed agreements with the Saudis: for oil supplies, cooperation in the area of research and development, and joint analyzes of investments in the area of petrochemicals.
Currently, PKN Orlen is waiting for the decision of the European Commission to take over Grupa Lotos. President of the Płock concern Daniel Obajtek in April it announced that the decision was expected in May. – The acquisition itself, understood as the registration of the company, is planned at the turn of the second and third quarter of this year – Obajtek said.
Main photo source: Shutterstock