The Austrians at OMV, the Americans at Occidental and Hungary’s MOL Group have submitted final bids for Petrom, which are to be analysed by the State. OMV could hardly lose this race, which it shows was best prepared for.
With enough cash available to buy the controlling interests, the Austrians have shown openness to take over Petrom as a whole, such as the Romanian State in its position as seller demanded in the first place. Moreover, OMV is the only candidate in the race to have realised a successful deal does not end with the signing of the privatisation contract and has already had contacts with the powerful union headed by Liviu Luca, who also runs Petrom’s Employee Association.
OMV and MOL, two of the three bidders, are most familiar with the Romanian market, as the Austrians have been operating here since late 1998, while the Hungarian group had made an entrance three and a half years before.
“The essence of OMV’s strategy is profitable growth and OMV has submitted a plan to the Government of Romania in this regard. As for the bid details, the parties have agreed to keep them confidential. Any further details on the privatisation process will have to come from the Government of Romania,” the Austrian officials said as comment on their bid for Petrom. Until the actual takeover is done, all three scenarios (OMV buys Petrom, MOL-Petrom equity swap, Occidental buys Petrom) need to be considered.
In the event OMV buys Petrom, this addition to OMV’s portfolio would help it gain a considerable competitive edge against its three competitors on the oil market in the Central and Eastern Europe, a market of 125 million consumers: MOL (Hungary), PKN Orlen (Poland) and Lukoil (Russia).
Hungary’s MOL Group, whose sales and capitalisation reach 5.7bn euros and about 3bn euros respectively proposed only an equity swap with Petrom, as part of a strategic partnership, instead of an actual takeover.
As for the third scenario, in the event the Americans that are not present on the regional market succeed in their Petrom endeavour, this would upset all calculations made on paper so far. With $9bn revenues and capitalisation twice the revenues, i.e. of more than $18bn, Occidental is as powerful a giant as OMV, MOL and PKN together and it would come right in the middle of this market. The only competitor matching Occidental’s size in the region would be Lukoil.
The Americans and their $1.5bn profit, are an operating efficiency model and have a staff of only 8,000. With sufficient cash for the deal and support from high-ranking politicians, they would be the only ones that could ruin OMV’s plans.
adrian.mirsanu@zf.ro