Central European oil puzzle after the acquistion of the Lithuanian Mazeikiu Nafta by the Polish PKN Orlen
On Friday, December 15th, the largest Polish oil company, PKN Orlen S.A., completed the acquisition of the Lithuanian oil company Mazeikiu Nafta. The purchase of 30,66% shares of the Mazeikiu Nafta from the Lithuanian government, after acquiring 53,70% from Yukos International UK BV, finalized the process that had begun some 18 months earlier. As a result of the acquisition of Mazeikiu Nafta, PKN Orlen S.A. became the largest oil company in the Central European region in terms of amount of crude oil processed (31,7 million tones per year) and number of petrol stations (2.732). However, it still lags in terms of market capitalization ($7,54 billion) to its main rivals: Austrian OMV and Hungarian MOL.
PKN Orlen S.A. competed for Mazeikiu Nafta with the Russian-British joint venture TNK-BP, Kazakh KazMunaiGas and Russian Rosneft. One of the reasons for the acquisition, justifying the highest price Orlen offered to Yukos and the Lithuanian government for the company, was the need to defend Orlen’s home market against the possibility of flooding it with cheap products by resourceful rival who would control Mazeikiu instead of it. However, this acquisition opens for Orlen an interesting strategic growth position, too.
