Orlen finalises merger with Lotos

PKN Orlen completed the acquisition of Grupa Lotos on August 1st 2022 by registering the merger with the District Court of Łódź - the refiner informed on Monday (August 1).

"We are making history. We have merged PKN Orlen and Grupa Lotos today. This is the culmination of a transaction which many thought and talked about, but failed to initiate and which we have successfully carried through," President of the Management Board of PKN Orlen was quoted as saying.

"We are not resting on our laurels. We have already taken action to quickly turn the identified synergies into tangible benefits for the companies, their shareholders and customers. We have strongly emphasised that this was our priority from the beginning. We have been investing heavily for the past four years and will continue to strengthen the business lines set to deliver profitable growth in the future," Obajtek added.

"The strong business of the new group will be built around the most valuable business segments leveraging the combined capabilities and resources of PKN Orlen, Grupa Lotos and, soon, of PGNiG. As a result, the resilience of the new group will be significantly enhanced amid a difficult and extremely volatile environment. This in turn will provide Poland and Poles with stable and reliable sources of energy – both in transport and industry," Orlen CEO said.

The refiner said in a statement issued at its website on Monday that its merger with Lotos, and eventually with PGNiG would strengthen its "position as the leader in energy transition through investments in low- and zero-carbon energy sources".

"By investing in green energy, including offshore and onshore wind farms and photovoltaics, as well as alternative fuels, small modular reactors and biomaterials, the new Orlen Group will significantly contribute to reducing Polish economy’s dependence on fossil fuels," the company said.

The acquisition of Grupa Lotos by PKN Orlen was initiated already in February 2018 by signing a Letter of Intent with the Polish State Treasury, which holds 53.19% of voting rights at the General Meeting of Grupa Lotos.

In January 2022, in the course of negotiations, PKN Orlen submitted a proposal of remedies and partners for their implementation, which was fully accepted by the European Commission by issuing a final clearance in June 2022.

In July 2022, the merger with Grupa Lotos was approved by PKN Orlen shareholders by an overwhelming majority of 98.3% of votes. Earlier, almost 99% of the Grupa Lotos shareholders had also resolved in favour of the deal.

According to decisions announced by PKN Orlen in January: Saudi Aramco is to purchase 30% of shares in Lotos refinery, Hungarian MOL - 417 Lotos gas stations, and Unimot - fuel storage facilities.

Orlen also signed a contract with the Saudis on oil deliveries, cooperation in the field of research and development, and joint analyses regarding investment in petroleum industry.

As part of this deal, Orlen Group is to take over 144 gas stations in Hungary, which is to give the company based in Płock a 7%-share in the retail market. This will also make Orlen the 4th-largest company in terms of the number of stations owned.

Furthermore, as part of the remedies mentioned in the contract, PKN Orlen will also extend its network in Slovakia by 41 new facilities.