Consolidation in Polish downstream sector - PKN Orlen to acquire controlling stake in Grupa Lotos
It seems in Poland that size does matter, particularly in the downstream sector. After several years of speculation, PKN Orlen announced on February 27th the intention to purchase the State Treasury's shareholding in rival company Grupa Lotos. The acquisition will only be possible if the relevant amendments are made to Polish legislation which currently forbids the State Treasury to sell shares in Grupa Lotos. The transaction is expected to cost PKN Orlen in the region of US$ 1.5 billion based on the current reported value of Grupa Lotos and take around one year to complete. But why merge the companies? How big will the combined companies be? What will PKN gain and will there be any implications from the competition authorities?