PKN Orlen oil and gas giant to take over Lotos and PGNiG in share swap deal

Łukasz Gągulski/PAP

Oil and gas group PKN Orlen will take over its peer Lotos and natgas group PGNiG by issuing new shares to be acquired by Lotos and PGNiG shareholders, the companies said in parallel market filings after striking an agreement with the State Treasury.

"As a result of the merger or the mergers respectively, shareholders of LOTOS Group and PGNiG, in exchange for the shares held in the share capitals of LOTOS Group and PGNiG, will acquire new shares in increased share capital of PKN ORLEN and as of the day of the merger or the mergers... will become PKN ORLEN shareholders," the filing read.

According to the State Assets Minister Jacek Sasin, after the swap the state will hold 50 percent of PKN Orlen shares which “will secure the company against the hostile takeover”. Currently, the state treasury has 27.52 percent of shares. He stressed that the swap will be cashless.

PKN Orlen CEO, Daniel Obajtek said that after the mergers the company “will be strong enough to play a major business and geopolitical role in the region of Central Europe.”

He added that he would like to finalise the transaction by the end of this year.

On Tuesday, PKN Orlen asked the country's anti-trust regulator UOKiK for the green light to take over PGNiG. It has already received approval, also from the European Commission, to merge with Lotos.