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PKN set to win EU approval to acquire Lotos

June 30/2020

MOSCOW (MRC) -- PKN Orlen (Plock, Poland), the country�s largest oil refiner and petrochemicals producer is set to gain EU antitrust approval for its takeover of smaller rival Lotos (Gdansk, Poland) after agreeing some concessions aimed at allaying competition concerns, according to Reuters citing people familiar with the matter.

PKN wants to buy at least 53% of Lotos. EU said it was concerned that the deal may push up prices and reduce competition in Poland, the Czech Republic, Estonia, Lithuania, Latvia and Slovakia.
 
PKN last month offered to sell Lotos� stake in a joint venture with BP called Lotos - Air BP Polska (LABP) and also pledged to supply jet fuel to LABP with the aim of creating a viable competitor. The company has since made some minor changes to the package after rivals and customers provided feedback to the European Commission, Reuters says.
 
The acquisition of Lotos by PKN was initiated in February 2018 by signing a letter of intent with the Polish State Treasury, holding 53.19% of voting rights. In April 2018, a due diligence process was commenced at Lotos to examine its commercial, financial, legal and tax positions ahead of the planned acquisition. In November 2018, a draft application for approval of the concentration was submitted by PKN to the European Commission.
 
PKN says the aim is to build a strong entity with international potential, which would be an important player on the oil supply market. This is particularly important for the fuel and energy security of supply for Poland, but also for Central and Eastern Europe. The creation of such an entity would also increase its ability to finance large, multi-billion-dollar projects. With the closing of the acquisition, Poland would join the global trend towards building major players on the fuel and energy market, PKN says.

As MRC informed before, in September 2019, Honeywell announced that PKN orlen had licensed the UOP MaxEne process, which can increase production of ethylene and aromatics and improve the flexibility of gasoline production. The project, for the PKN Orlen facility in Plock, Poland, was in the basic engineering stage then.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC"s ScanPlast report, Russia"s estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim.  At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, PP, PE, petrochemistry, Grupa Lotos SA, PKN Orlen.
Category:General News
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