Merger of Poland’s fuel giants on final stretch

Due to some divestments required by the European Commission (EC) in order for the Polish fuel giant Orlen’s acquisition of Lotos Group to be accepted, the company will sell some of its shares in the acquired company to Saudi Arabian and Hungarian companies. In exchange, it will buy gas stations in Hungary and Slovakia, which would allow it to expand further south.

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In July 2020, the EC approved the acquisition of Lotos Group by PKN Orlen under the condition that certain divestments are carried out. Both Lotos and Orlen are controlled by the Polish state.

As reported by Daniel Obajtek, the CEO of PKN Orlen, Saudi Aramco, a Saudi Arabian oil company, will buy a stake in the refining subsidiary of Polish oil company Lotos, which Orlen is currently in the process of acquiring. The MOL Group, a Hungarian oil and gas company, is to purchase Lotos’ 417 petrol stations.

PKN Orlen announced on Wednesday that, according to the preliminary agreement, Saudi Aramco is expected to pay around PLN 1.1 bn (EUR 243 mln) for its stake in the Lotos Asfalt company. Additionally, Orlen has signed a long-term contract with the Saudi Arabian company for oil supplies of between 200,000 and 337,000 barrels per day.

“The agreement with Orlen will allow the development of petrochemicals in Poland and the entire Central and Eastern Europe, and the supplies of Arabian oil are a powerful injection for the Polish market,” Mohammed Al Qahtani, the Saudi Aramco’s CEO, said, commenting on the transaction.

Additionally, the companies also signed contracts for the area of petrochemical analysis and investment as well as cooperation in research and development.

When it comes to the preliminary agreement between PKN Orlen and the Hungarian MOL Group, the “fixed” part of the price for 417 petrol stations owned by Lotos is around EUR 537 mln. The agreement also foresees that Orlen will buy 144 petrol stations operated by the MOL Group in Hungary and 41 stations in Slovakia for around EUR 229 mln.

As part of the acquisition of Lotos by Orlen, the Polish company Unimot will take over the fuel base of the acquired company.

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