ARMO: The Austrian Connection

On 25 September 2007, state-owned OMV made a Euro 14 billion offer for MOL which was, in practice, a declaration of war against Hungary. OMV is now aiming to do what the Russians were allegedly up to: to create a Central European powerhouse, despite fierce opposition by both MOL and the Hungarian government. On October 8, the Hungarian parliament passed a law, referred to as “Lex MOL”, for the specific purpose of blocking the offer and any other foreign takeover of MOL.
The European Commission has launched two separate investigations. The first is directed at the Hungarian government and their Lex MOL. The Commission formally warned Hungarian authorities in November that it considered the law “incompatible” with EU rules allowing unrestricted cross-border investment in Europe.
Simultaneously, the European Commission stopped the merger and has opened a detailed investigation under the EU Merger Regulation into the proposed acquisition by OMV of MOL. The European Commission will rule by June 22, 2008 on the proposed Euro 14 billion takeover after its initial review revealed the merged group might be left with a crushing grip on some markets. OMV owns a refinery in Austria and two refineries in Bavaria. It has a controlling interest in Petrom (Romania), and is active in the wholesale and retail markets for refined oil products in Austria, the Czech Republic, Germany, Hungary, Slovakia, and Slovenia. MOL owns Slovnaft, which operates the only Slovakian refinery and has a 25 percent interest in the Croatian oil company, INA. Also, MOL recently bought the Italian company, IES, which has a refinery in Mantova. MOL is an established player in the wholesale and retail supply of refined oil products, in Hungary, Slovakia, Austria, the Czech Republic, and Slovenia. The proposed acquisition would bring together two strong integrated oil and gas companies active in several Central and Eastern European (CEE) countries. It remains to be seen which of the two companies would emerge as victorious in this battle. No one should be surprised if MOL finds time and has the muscle to buy ARMO, only to bring ARMO further into a merger with OMV. (Tirana Times Staff)