The merger of PKN Orlen with Grupa Lotos would be favorable due to better protection from hostile takeovers and in terms of Poland's energy security, PKN Orlen CEO Piotr Kownacki said in an interview for daily The Wall Street Journal Polska. Kownacki said that the idea to merge Poland's top two refiners, which had been abandoned several years ago, was revived following Hungarian allegations that its top refiner MOL was being targeted for a hostile takeover by Austrian rival OMV. Kownacki added that a decision about the potential merger of the two state-controlled firms is far away and uncertain, but emphasized that if the merger was to take place, it would have to be carried out on "friendly terms" and there would be no need for Lotos to halt realization of its development program, which is currently underway.
We see the merger as possible in a mid- to long term. Though government officially denied the rumors, Mr. Kownacki is known to have close tights with the State treasury, therefore his opinion might echo the potential considerations to merge the two. We believe that the news will have the neutral trading impact today.