PKN Orlen-PGNiG merger gets regulatory nod
Polish gas group PGNiG said on March 16 that its merger with oil refining company PKN Orlen, aimed at building a global, diversified energy concern focused on central Europe, has received regulatory approval from the Polish office of competition and consumer protection (UOKiK).
PGNiG is merging with PKN Orlen as part of plans for a supercharged Polish group that will also include Grupa Lotos, operators of a Polish refinery, filling stations and overseas upstream assets.
PKN Orlen holds a leading position in central Europe's fuel market, with control of six refineries and thousands of filling stations in Poland, the Czech Republic, Germany, Lithuania and Slovakia. It also has a domestic upstream presence as well as operations in Canada.
The competition approval comes with one key string attached - PGNiG Group must divest its gas storage subsidiary, Gas Storage Poland. Gas Storage Poland's facilities have a total working capacity of around 3.2bn m3. A planned expansion at its Kosakowo underground gas storage facility described as "of strategic importance for Poland's energy security."
Regulators say the new owner of Gas Storage Poland will have to meet approval criteria, and make commitments to guarantee Polish energy security. The buyer cannot "belong to a capital group that trades in natural gas", PGNiG said.
PGNiG and PKN are now free to continue operational work for the merger, having previously secured EU antitrust approval for its Lotos takeover in July 2020. The two companies have already been preparing "for a safe and effective merger" over a period of "several months", but must also finalise consultations with trade unions in the PGNiG group.
Under the Lotos approval, PKN agreed to sell its 30% stake in Lotos' refinery, as well as various downstream production and storage assets. It later said it had done so to Saudi Aramco and Hungary's MOL.
Backed by the Polish ministry of state assets, the merged entity will have a market capitalisation of around 80bn zloty ($18.9bn) and serve over 100mn central European customers. Polish state asset minister Jacek Sasin said on March 16 that his ministry's stake could reach almost 50% once the transition completes.
"UOKiK's consent to the merger with PGNiG is another important step on the way to the creation of one strong multi-energy concern that will guarantee energy security not only for Poland, but for the entire region," said PKN Orlen president Daniel Obajtek. "The importance of energy security has become particularly clear recently. The finalisation of the merger of PKN Orlen, PGNiG and Lotos is an opportunity for Poles to have access to safe energy at acceptable prices."