WARSAW (Reuters) - Poland’s biggest oil refiner, the state-run PKN Orlen, said on Monday negotiations with the European Commission over its planned takeover of smaller rival Lotos (LTSP.WA) had entered their most difficult phase.
PKN said last year that it planned to buy at least a 53% stake in rival Lotos (LTSP.WA), which has a market capitalization of 16.6 billion zlotys ($4.38 billion), from the government.
It formally requested the Commission approval last week and sources familiar with the situation in Brussels and Warsaw said that due to competition concerns PKN will likely face long and difficult talks with the Commission.
“There are various difficulties, including preventive measures, talks with competition, it has to make sense for us in business terms. We are doing everything for the process to succeed. There is always a risk,” PKN Chief Executive Daniel Obajtek told reporters, without elaborating.
“Now the negotiations are in the most difficult phase, we meet the Commission much more often, talk to the competition,” Obajtek also said.
The Commission can either clear the deal with or without conditions after its preliminary review or it can open a four-month long investigation.
Sources said PKN faced a four-month probe since the combination of companies ranked No. 1 and No. 2 in a sector is always problematic for EU competition enforcers.
PKN had expressed hopes to complete the deal by the end of this year.
Reporting by Agnieszka Barteczko; editing by Emelia Sithole-Matarise