The European Commission has greenlighted the merger between the Polish oil refiners and retailers PKN Orlen (27.5% state-owned) and Grupa Lotos (53.2% state-owned). Previously, the two companies signed a merger plan involving the transfer of the Lotos assets to PKN Orlen. In exchange for one share held in Grupa Lotos, its existing shareholders will receive 1,075 shares in the enlarged PKN Orlen. The transaction, which should close in August 2022, is subject to approval of the share exchange ratio and other terms of the merger by shareholders of both companies. At a later stage, PKN Orlen merged with Grupa Lotos should be combined with the Polish national oil and gas company PGNiG.
PKN Orlen is active in oil production, transportation (it operates 1,900 km of oil pipelines in Poland, including 930 km for crude oil and 960 km for oil products), refining (16 Mt/year Plock refinery and 53% indirect stake in Grupa Lotos' 10.5 Mt/year Gdansk refinery), wholesale of oil products (15 Mt sold in Poland in 2020) and retail (1,830 service stations, i.e., 1/4 of the market in March 2021, plus 700 stations held by Grupa Lotos (9%). Grupa Lotos operates in oil upstream activities in Poland (61 mboe of reserves and production of 20 kb/d hydrocarbon in 2020, including 5.3 in Poland), Norway, and Lithuania, as well as in refining and distribution; it also owns and operates a refinery in Gdansk with a capacity of 10.5 Mt/year.
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