Poland's PKN Orlen plans acquisition of Energa

Polish energy company PKN Orlen (WAR:PKN) last week announced plans to take over local utility Energa SA (WSE:ENG).

PKN Orlen said it would offer PLN 7 for each share in Energa, valuing the company at PLN 2.9 billion (USD 730m/EUR 663m). Energa is 51.5% owned by the Polish government, which also owns 27.5% of PKN Orlen.

Shareholders in Energa will have between January 31, 2020 and April 9, 2020 to subscribe to the tender offer. PKN Orlen is targeting subscriptions for shares that give it least 66% of the total number of votes in order to proceed with the acquisition. The period may be extended if the subscriptions do not meet PKN Orlen's target.

Renewable energy sources, including hydropower plants, solar power parks and onshore wind farms, accounted for 41% of Energa's total energy production in the first half of 2019. The acquisition will thus see PKN Orlen take over a significant portfolio of renewable energy assets, in addition to an extensive distribution network in northern and central Poland. This is important as the buyer is developing a 1.2-GW offshore wind project.

The tender offer for Energa is in line with the oil refiner and petrol retailer's strategy of diversifying its revenue sources, PKN Orlen Chief Executive Daniel Obajtek said.

The deal is expected to be completed by the middle of 2020, pending approval from the European Commission, Obajtek told Reuters.

(PLN 10.0 = USD 2.5/EUR 2.3)

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