By Foo Yun Chee

Poland's biggest refiner PKN Orlen has offered to sell assets in its home market as part of a package of concessions aimed at allaying EU antitrust concerns over its Lotos bid, people familiar with the matter said on Wednesday.

The offer came after the European Commission last month set out its concerns about the deal in a so-called statement of objections, making it near impossible for PKN to win approval without concessions.

The extensive package of concessions includes quasi-structural and also so-called behavioural concessions, the people said. Structural concessions normally refer to asset sales and access to key infrastructure or inputs while behavioural means pledges to abstain from certain practices such as hiking prices or reduce the range of products.

PKN's concessions cover the wholesale fuels market, retail supply of fuels and supply of jet fuel, bitumen and lubricants, areas singled out by the European Commission when it launched a full-scale investigation into the deal in August last year, the people said.

The Commission, which has set a June 30 deadline for its decision, declined to comment, as did PKN. The EU executive will seek feedback from rivals and customers before deciding either to accept the offer or demand more.

State-run PKN announced its bid for at least 53% of smaller rival Lotos, in which Poland holds a 53.19% stake, in 2018. EU competition enforcers, however, said the deal may lead to higher prices and lessen competition in Poland, the Czech Republic, Estonia, Lithuania, Latvia and Slovakia.

PKN is hoping that regulators will take the impact of COVID-19 into account when assessing the deal and efforts by Poland to comply with EU climate goals.

The argument is that a merged company will have the financial firepower to make the hefty investments required to help the country, which relies heavily on coal-fired power stations, to decarbonise.

PKN and Lotos, which respectively operate 1,800 and 506 Polish petrol stations, will defend the deal to senior Commission officials and national competition agencies during a video hearing on Monday.

(Reporting by Foo Yun Chee, additional reporting by Agnieszka Barteczko in Warsaw; editing by Robin Emmott, Elaine Hardcastle and Emelia Sithole-Matarise)