Merger of MOL and OMV would be "unacceptable" regional monopoly

Oct 17, 2007 02:00 AM

The merger of Austrian oil company OMV and Hungarian peer MOL -- a move pushed by OMV and rejected by MOL -- would create a fuel monopoly in three countries of the region, an outcome that EU authorities would likely not approve, MOL CEO Gyorgy Mosonyi said.
OMV currently controls just over 20 % of MOL, and has expressed its intentions to launch a public offer for a majority stake, as soon as MOL and the Hungarian state remove existing legal and technical obstacles preventing OMV from achieving actual control over MOL.

Reaffirming MOL's position, Mosonyi said that in the event of a merger, EU authorities would likely require the sale of one refinery (out of the combined group's three refineries in Austria, Slovakia and Hungary), and as many as 400-500 filling stations.
According to MOL's estimates, a combined MOL-OMV group would have a 97 % share of Hungary's wholesale gasoline market, and 94 % on the wholesale diesel market. The respective figures would be 67 % for gasoline and 75 % for diesel in Austria, and 88 % for gasoline and 83 % for diesel in Slovakia, Mosonyi noted.

Mosonyi said that MOL will not delete from its articles a 10 % limit on voting rights, as requested by OMV, as similar provisions are used by a number of Western European companies as well. Mosonyi also disputed widely-held interpretations that MOL has control over more than 40 % of its own shares.
While MOL currently owns less than 10 % of its own shares directly, the company previously carried out large share buybacks, and placed packets of 8-10 % each under the control of what the market widely views as "friendly" third parties, including Hungarian state development bank MFB, and Hungary's top bank OTP, whose Chairman and CEO Sandor Csanyi also sits on MOL's board.

Mosonyi stressed that OMV's buyout attempt has "failed," and it is "time for OMV to present a 'Plan B.'"
While OMV has been stressing regional oil industry consolidation as a rationale behind its plans, Mosonyi said that OMV's actual intention is to "take out" MOL from oil industry competition in the region.

Source: Interfax
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