Hungary proposed new legislation on Wednesday to stop state-owned foreign companies buying strategic assets, which would help oil company MOL resist a takeover by OMV. The aim is to allow the government to control what corporate influence companies controlled by foreign governments can acquire in firms and businesses which serve Hungary's strategic interests, government spokesman David Daroczi told Reuters. The new legislation is expected to be in line with European Union rules.
Our view: We believe that the new legislation would hamper the acquisition attempts and would lower the chance for OMV and MOL deal to take place. From the very beginning it looked like not only economic considerations but also political ones will be decisive in this matter. The news might cool down the merger related speculations on the market which in turn puts downward pressure on MOL’s share price.