"OMV has organised its fifth international media day in Vienna and interest in the venue was undeniably bigger than in previous years - and not just from Hungary. The presentation of the Austrian fuels group's management did not provide many novelties, and the focus remained on the expected consolidation in the region's fuels industry and, naturally, on efforts to buy up MOL, which was painstakingly stressed as a “combination" of the two groups.OMV said it was not willing to make a public bid on MOL for the 10% voting limitation the Hungarian company has.
On 25 September OMV said it was prepared to offer to MOL's shareholders HUF 32,000 per share of MOL once the impediments to achieve voting control of MOL have been removed (the 10% voting limitation is removed and the shares under management control are cancelled).
OMV chief executive Wolfgang Ruttenstrofer reiterated that consolidation in the region's oil industry has not finished yet and that merger activities would continue in Eastern Europe. He believes Russian companies will appear on the buy side, with an intention to exploit not only production but also refining advantages. Crude supply will greatly determine the consolidation process, the CEO said, adding that Russian oil companies will start expand as global enterprises (Exxon, Conoco) withdraw from the region.
OMV reiterated that a “combination" of OMV and MOL would provide mutual advantages for both parties and their joining would create a very strong oil company in the region. Ruttenstorfer said a “combination" of the two is a "win-win option", because of:
Excellent strategic fit: creating a leading integrated European oil and gas company;
Attractive premium for MOL shareholders;
Value enhancing to OMV shareholders;
Enhances security and diversity of energy supplies;
Underscores commitment to Hungary and CEE region;
Strong combined platform for growth;
Attractive synergy potential;
Increased opportunities for workforce of both companies.
Strengths and opportunities:
Scope and scale to compete with major oil and gas companies;
Integrated oil and gas business with strong platforms for growth;
Ability to enhance investment to take on larger projects and roles;
Enhanced optionality for OMV-MOL from Mediterranean, Russian and Central Asian crude supplies and product sales logistics;
Combines skill sets of two excellent workforces.
The company has not altered its strategy for the period up to 2010, and the CEO said the company was doing good progress in achieving the goals.
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Source:
Portfolio Online Financial Journal
10.10.2007