The Polish government is pushing to combine the country's two biggest state controlled refiners, PKN Orlen and Lotos Group, in a bid to create a Polish group capable of competing in international markets and, possibly, capable of taking part in Poland's plans to build the first nuclear power plant.
Both companies are amongst the top 10 on the Polish market insofar as turnover is concerned, with PKN Orlen being the largest company on the Polish market for years, whereas Lotos Group has always been among the top 5-7 largest companies in Poland.
According to a letter of intent between PKN Orlen and the Polish government signed in late February, PKN Orlen is to take over a 53% controlling stake in the Lotos Group. The high turnover figures involved trigger the Commission's jurisdiction. The President of the Polish Competition Authority has already confirmed that, even though the Polish NCA is ready to assess the deal, it will be up to the Commission to decide whether to evaluate the transaction on its own or to refer the merger.
Taking into account the recent practice of the Commission, as well as the fact that the deal seems to be driven by political rather than economic reasons, and in view of the recent tensions between the Commission and Poland over the rule of law in Poland, this is a case which bears watching closely.
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