Poland surprised the markets on Jan. 11 with plans to merge its biggest oil and gas firms to forge central Europe's number one energy company and prevent any hostile takeover threat.
Treasury minister Dawid Jackiewicz is considering tie-ups between the state-run oil refiners PKN Orlen and Lotos, and gas firm PGNiG, with the analysis to be ready by the end of this quarter.
Put together their joint market value would stand at 60 billion zlotys (US$15 billion), almost twice as much as Austria's OMV and three times the market cap of Hungary's MOL.
"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% stake, holds 53.2% in PKN's smaller rival Lotos and 72% 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.
PKN's newly appointed chief executive, Wojciech Jasinski, was the treasury minister in PiS' previous government in 2006-2007, working on the merger that did not happen.
The market worries that such a move now would add to a campaign to seize more control over the economy by Poland's ruling conservatives after the government already ousted several top executives of state-owned companies, including PKN.
"This is another signal for the investors that the government is entering the strategic sector. Investors want to make money and the state has different, not necessarily market-related aims," Radoslaw Lipinski, analyst at Pekao Investment Banking said. (US$1 = 4.0023 zlotys)
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