[KGHM] Poland studies energy sector mergers, copper concerns (Reuters U.S. – January 11, 2016)


WARSAW – Poland surprised the markets on Monday with plans to merge its biggest oil and gas firms to forge central Europe’s No.1 energy company and prevent any hostile takeover threat.

Treasury minister Dawid Jackiewicz is considering tie-ups between the state-run oil refiners PKN Orlen PKN.WA and Lotos LTSP.WA, and gas firm PGNiG PGN.WA, with the analysis to be ready by the end of this quarter.

Put together their joint market value would stand at 60 billion zlotys ($15 billion), almost twice as much as Austria’s OMV (OMVV.VI) and three times the market cap of Hungary’s MOL MOLB.BU.

“I have started works on this concept to find out what positive effects one could expect,” Jackiewicz said. “This is about strengthening our position in these companies in order to prevent attempts of hostile takeovers.”

Poland controls PKN via a 27.5-percent stake, holds 53.2 percent in PKN’s smaller rival Lotos and 72 percent of PGNiG. Jackiewicz said that the treasury would consider more than one merger option between the three.

The government, formed by last-year’s election winner – the conservative Law and Justice (PiS) party, considered merging PKN and Lotos already in 2007, fearing the groups, which mostly refine Russian oil, could be targeted by a Russian rival.

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