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| OMV seeks talks with Hungary’s Mol |
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By Christopher Condon in Budapest and Eric Frey in Vienna
Published: June 25 2007 12:54 | Last updated: June 25 2007 12:54
OMV, the Austrian oil and gas company, on Monday launched an effort to cement its dominance in central and south-eastern Europe by calling for takeover talks with Mol, the Hungarian oil company that also operates across the region.
Mol is Hungary’s largest company with a market capitalisation of about €11.6bn, compared with OMV’s €12.8bn. The two companies have combined sales of about €30bn and an alliance would see the merged company dominate the refining and fuel markets from Austria to the Black Sea.
OMV said in a statement that an alliance between the two companies would give them “the scale and scope to compete effectively with the larger oil and gas companies in the world”.
A takeover of Mol by OMV will also boost efforts behind a proposed pipeline project to bring natural gas from the Caspian region to central Europe.
Known as Nabucco, the pipeline will offer the region an alternative to Russian gas. Both OMV and Mol are part of the Nabucco consortium, but OMV is decidedly keener on the project as the lead organiser.
The Hungarian government has signalled in recent months that delays in Nabucco are making it consider an alternative deal between Gazprom and Mol that would bring Russian gas to Hungary through an extension of Gazprom’s Blue Stream pipeline project.
Gas pipeline projects are highly political and costly. On Sunday, Gazprom and Italy’s Eni announced plans for a new €10bn pipeline project to take Russian gas to Europe. That announcement is likely to raise concerns about Europe’s dependence on Russian supplies.
OMV’s approach is likely to be turned down by Mol’s management, which signalled that it would resist a takeover attempt. Wolfgang Ruttenstorfer, OMV’s chief executive, has in the past ruled out a hostile takeover.
Tamas Pletser, regional energy analyst for Erste Bank, said: “Mol wants to remain independent and management has strong influence over key shareholders.”
OMV also said on Monday it had increased its stake in Mol from 10 per cent to 18.6 per cent. It had bought the shares from three related minority shareholders for around €1bn.
In a statement, it said it would like to conduct "structured discussions with the Mol management" that should result in a "combination" of the two companies.
OMV has marketing, refining and production assets across the region. In retail fuels sales, it is the market leader in Austria and Romania, where it purchased the former state-owned Petrom for €1.5bn in 2004. It had consolidated sales in 2006 of €19bn.
Copyright The Financial Times Limited 2007
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Source: The Financial Times Limited 2007; 20070625 |
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