Two Polish state energy firms companies, oil refiner PKN Orlen and oil and gas producer PGNiG, finalised their merger on Wednesday. Their fusion marks the latest step in expansion plans for Orlen, which was already the largest company in Central and Eastern Europe and has ambitions to become a global player
“We have merged with PGNiG,” tweeted Daniel Obajtek, CEO of Orlen, which already recently acquired another Polish state-owned refiner, Lotos, and electricity provider, Energa. “Thus, we are finalising the acquisition processes thanks to which we enter the ranks of the 150 largest companies in the world.”
Połączyliśmy się z @GK_PGNiG. Tym samym finalizujemy procesy przejęć, dzięki którym wchodzimy do grona 150 największych firm na świecie. Stworzyliśmy potencjał do realizacji wielomiliardowych inwestycji wzmacniających bezpieczeństwo i niezależność energetyczną Europy Środkowej
— Daniel Obajtek (@DanielObajtek) November 2, 2022
At the end of July, Orlen and PGNiG signed a merger plan that involved the transfer of all PGNiG assets to Orlen in exchange for Orlen shares awarded to PGNiG shareholders.
In exchange for one PGNIG share, the company’s shareholders would receive 0.0925 merger shares. PGNiG’s shareholders – the biggest of which is the the Polish state, which owned over 70% of the company – approved the merger last month.
The final step was the registration of the merger by a court, which took place on Wednesday, the company said. The process of integrating the subsidiaries acquired by Orlen, Lotos Group and PGNiG, will be completed within 10-12 months, ISBnews reports.
The deal will cement Orlen’s place as the largest company in Central and Eastern Europe, bringing in revenue of up to 400 billion zloty ($83.74 billion) a year, according to Obajtek. In 2021, Orlen’s revenue was $33.16 billion.
In comparison, another large Central European oil company, Hungary’s MOL Group, last year recorded revenue of $19.18 billion. Meanwhile, the biggest European oil company, British Shell, reported revenue of $272.66 billion in 2021.
Orlen’s expansion plans have had strong backing from the government, which wants to create a national champion. As well as its energy acquisitions, Orlen has also bought hundreds of local news outlets, replacing many of their editors with figures more sympathetic towards the ruling party.
During a press conference on the finalisation of the acquisition, Obajtek said that his firm is planning further investments and acquisitions. “We are discussing any acquisition processes that can strengthen us,” said the CEO, quoted by ISBnews.
Asked whether the company was interested in taking control of the German refinery in Schwedt, as reported in the media, Obajtek indicated that Orlen was “talking to many partners in Europe, including in Germany”. He did not, however, explicitly confirm if the acquisition of the Schwedt plant was discussed.
Following the announcement of the finalisation of the acquisition, Orlen shares rose by 5.68% on the day.
Main photo credit: PKN Orlen press pack
Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.
