European Commission approves takeover of rival Lotos

European Commission approves takeover of rival Lotos

The European Commission EC has given the final approval for the takeover by Poland's dominant oil and gas company, PKN Orlen, of its rival Lotos Group.

The announcement was made by PKN Orlen on Monday.

The takeover was approved by the European Commission after approval of the contracts agreed upon with the buyers, PKN Orlen wrote in a statement.

PKN Orlen plans to take over the Lotos Group in late July or early August, PKN Orlen CEO Daniel Obajtk said.

The contracts should come into effect within six months of their approval by the EC.

On June 2, PKN Orlen's management board approved a plan to merge with Lotos.

Only as a group with diversified revenues and resistant to extremely dynamic changes in the macroeconomic environment, will we be able to respond effectively to challenges and carry Poland through the difficult and demanding energy transition, Obajtek said at the time.

The takeover of the Lotos Group by Orlen was initiated in February 2018. Orlen filed a preliminary motion for EU approval of the transaction in November 2018, followed by an official motion in July 2019.

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

As part of the disinvestments required by the EC, Saudi Aramco, a Saudi Arabian oil company, bought a stake in the refining subsidiary of Lotos, while the MOL Group, a Hungarian oil and gas company, purchased 417 petrol stations from Lotos. Orlen bought 144 petrol stations operated by the MOL Group in Hungary and 41 in Slovakia.

PKN Orlen owns two refineries in Poland as well as refineries in Lithuania and Czechia. It is active on the wholesale and retail markets for refined oil products in Poland, Austria, Czechia, Estonia, Latvia, Lithuania, Germany and Slovakia.

It also has activities in upstream exploration, development and production of crude oil and natural gas.