Polish oil refiner PKN Orlen’s (PKN.WA) bid for rival Lotos (LTSP.WA) may reduce competition in Poland and neighboring countries and push up prices, EU antitrust regulators said on Wednesday as they opened a full-scale investigation.
State-run PKN wants to buy at least a 53% of Lotos, in which the government holds a 53.19% stake. The companies own the only two refineries in Poland and are also present in the Czech Republic, Estonia, Latvia, Lithuania and Slovakia.
The European Commission said the deal may lead to higher prices and curb competition, confirming a Reuters report on July 4.
In the wholesale supply of fuels, the combined company would be a quasi-monopoly facing limited competition from imports, the EU antitrust enforcer said.
It said in the retail market, the merged company would be four times bigger than the next rival while airports would have only one jet fuel supplier.
The deal would also eliminate the only competitor to PKN in bitumen supply in the Czech Republic, Estonia, Latvia, Lithuania and Slovakia. The combined company would have a dominant share of the provision of mandatory storage facilities in Poland.
The Commission also expressed concerns about downstream rivals being shut out of the market because of the volumes of fuels held by both companies. It set a Dec. 13 deadline for its decision.
Rival BP (BP.L), with 550 petrol stations in Poland versus PKN’s 1,783 and Lotos’ 493, has criticized the deal.
Source: Reuters.com