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Home Finance & Regulations European Commission gives green light for PKN ORLEN to take over ENERGA

European Commission gives green light for PKN ORLEN to take over ENERGA

Poland’s state-run oil refiner, PKN ORLEN has received the unconditional consent of the European Commission to take over ENERGA Group, one of the country’s largest electricity suppliers. The takeover is expected to help the further diversification of ORLEN’s operations and strengthen the company’s position on the competitive European market.

“The transaction aims to achieve benefits for both companies and to strengthen the Polish economy in the face of emerging challenges,” reads the company’s announcement.

“Today, we are a step further in achieving our strategic goal, which is building a strong group capable of competing on the international market and resistant to changing macroeconomic factors,” said Daniel Obajtek, President of the Management Board of PKN ORLEN, welcoming the positive decision of the European Commission regarding its consent to purchase ENERGA Group shares. “This is especially important in such a difficult situation that we are now facing due to the coronavirus epidemic.”

PKN ORLEN considers the merger an opportunity to diversify its revenue sources, thus increasing the stability and security of the entire Group. The consolidation of the energy, fuel and oil industry has become a lever for the development and competitiveness of national companies in Europe and the world. The creation of multi-utility concerns is part of a megatrend implemented by other players across the fuel industry as the diversification increases the companies’ resistance to market fluctuations and changes in the macroeconomic environment. Regional competitors of the ORLEN Group, such as MOL, OMV, Repsol, as well as global giants such as BP, Shell and Total are developing their business activities in this direction.

As part of the call, PKN ORLEN set the price of ENERGA Group shares at 7 złotys, valuing the company at 2.9 billion złotys (632 million euros). The company is targeting subscriptions for shares that give it least 66 per cent of the total number of votes in order to proceed with the acquisition.

Renewable energy sources, including hydroelectric power plants, onshore wind farms and solar farms make up for 30 per cent of the electricity produced by ENERGA, which is the highest share among its competitors. The renewable energy portfolio can balance conventional assets owned by PKN ORLEN, which has special significance PKN ORLEN, through its subsidiary Baltic Power, holds a license to build wind farms in the Baltic Sea with a maximum total capacity of up to 1200 megawatts (MW).

The takeover can open doors for ORLEN to become a major player in the area of electromobility as well. The combination of the company’s existing network of its fast chargers with the ones installed by ENERGA Group and Grupa LOTOS would enable the creation of the second-largest infrastructure with 133 charging points, ensuring good geographical coverage.

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