Geradin Partners represented PKN Orlen in securing conditional clearance from the European Commission for its proposed merger with Grupa Lotos. PKN Orlen and Grupa Lotos are the only two vertically integrated oil companies in Poland, and they collectively own 5 refineries in Poland, the Czech Republic and Lithuania. The transaction is the most complex acquisition in the history of the energy sector in Poland and of the biggest transactions ever in the CEE region.
Obtaining clearance was extremely challenging from an antitrust perspective. A complex set of remedies was required to address the European Commission’s antitrust concerns on several markets. Among other things, a 30% stake in Lotos’ Gdansk refinery will be divested. Moreover, Orlen will also divest and release fuel storage.
In addition to the remedies in fuel refining and storage, commitments cover retail supply of fuels, jet fuel as well as bitumen markets. With respect to retail, the remedy package includes 389 stations. The bitumen package includes the divestment of production assets in Poland. Concerning the jet fuel market, the remedy package encompasses the construction of a new jet fuel sea terminal to be owned and operated by a private operator. In addition, Orlen will divest the stake in Lotos’ into plane subsidiary, Lotos-Air BP.
The clearance decision follows a 12-month review process by the European Commission. As a result of the Covid-19 pandemic, the Parties’ hearing before the European Commission was held virtually, which was unprecedented.
The Brussels-based Geradin Partners’ team was led by Partner Philip Lux and Senior Consultant Gavin Robert, assisted by Counsel Mathieu Relange, and Associates Katrzyna Sadrak and Pawel Zukowski.