GDANSK/WARSAW, June 2 (Reuters) - Poland's biggest oil
refiner PKN Orlen and number two player Grupa Lotos
said on Thursday their management boards had approved
plans for a merger first announced in 2018 but delayed by
Both refiners are state controlled and the merger is part of
a wider plan by Poland's ruling Law and Justice (PiS) party to
increase control over the economy and build big national
companies to better compete with global players.
Shareholders of Lotos will get 1.075 shares of PKN for each
Lotos share, the companies said.
For the merger to take effect shareholders of both groups
must approve the share exchange. Shareholders owning at least
80% of Lotos shares have to back the merger terms to approve it.
Poland's State Treasury controls 53.2% of Lotos and 27.5% of
Orlen. It plans to end up with a 35.7% stake after the merger,
PKN said in a presentation.
General shareholders meetings are expected to be held in
July, while the merger should be registered and finalised in
PKN Orlen had announced plans to buy Lotos in 2018, but had
to meet conditions set by the European Commission. In January,
PKN said it would sell some Lotos assets to companies including
Saudi Aramco and Hungary's MOL to fulfill EU
antitrust rulings and complete its takeover.
Critics, including Poland's several former economy
ministers, said selling Lotos's assets, including a stake in the
Gdansk refinery and a large chunk of its retail network to MOL,
lacked transparency and could result in domination of Russian
fuels on the local market.
These arguments gained traction after Russia invaded Ukraine
and Hungary blocked European Union sanctions on Russian oil and
But Orlen and the government argue that the merger will
improve company's market position, its bargaining power and
Lotos shares gained 0.7% on Thursday to trade at 70.84
zlotys, while PKN's shares lost 0.5% to 71.98 zlotys. The merger
plan was announced after the market close.
($1 = 4.2598 zlotys)
(Reporting by Marek Strzelecki, Anna Koper, Adrianna Ebert and
Anna Banacka; Editing by Kirsten Donovan and David Holmes)