Poland mulls oil-and-gas merger push to avoid hostile takeovers

WARSAW (Bloomberg) -- Poland’s government is considering merging the nation’s biggest oil and gas companies PKN Orlen SA, Grupa Lotos SA and PGNiG SA, three stalwarts of the Warsaw bourse.

The government will complete an initial analysis of the potential consolidation by the end of March, which includes various options for mergers, before deciding whether to proceed, Treasury Minister Dawid Jackiewicz said on Monday. PKN, Lotos and PGNiG have a joint market capitalization of more than 59 billion zloty ($14.7 billion), oversee almost all of Poland’s oil and gas imports, which come mostly from Russia, and have a dominant role in refining and retail. All three are controlled by the government.

“We want to secure the interests of the State Treasury against potential hostile takeovers,” Jackiewicz told reporters in Warsaw. “We have no plans to delist the companies.”

Poland’s two-month-old government seeks to reduce reliance on Russian energy imports and has appointed ruling-party experts as the new CEOs in PKN and PGNiG. Warsaw’s stock index has lagged emerging-market peers in past months amid concern over new taxes on banks and retailers as well as still unspecified plans to consolidate state-controlled power utilities with loss-making coal mines.

PGNiG, Poland’s biggest gas company, slumped 2.5% to 4.63 zloty at 11:37 a.m. in Warsaw, on track for the lowest close in 11 months. Lotos shares dropped 0.5% to 26.06 zloty while PKN gained 0.6% to 63.55 zloty.