Hungary's competition authority has “serious concerns” about a €14 billion proposed bid by Austria's OMV for Hungary's MOL and said approval may require a refinery sale.“From what information we have received so far, we maintain that we have serious concerns over (the proposed) merger,” Zoltán Nagy, the chairman of authority GVH, told Reuters on Wednesday.
“Our concerns are serious enough that the sale of a refinery may be needed,” Nagy said on the sidelines of a news conference.
MOL has fought the deal, saying it would create a virtual monopoly in refining and wholesale in Central Europe and would therefore reduce competition and destroy shareholder value.
It has refused to engage in discussions with its larger rival about teaming up.
Nagy said GVH shares some of MOL's concerns over the deal, though stressed the watchdog has yet to formulate a final opinion in the deal.
“In refining and wholesale, the merger would form a near monopoly in Hungary, Austria, Slovakia, and possibly, and I stress possibly, in parts of Northern Italy and Southern Germany,” he said.
“We're not sure that our concerns over refining and wholesale can be eliminated completely.”
OMV has asked the European Commission to investigate its proposed takeover.
The Commission launched an in-depth investigation this month and has set a July 22 deadline for a review.
“We are not concerned about retail but the gas market could also present a problem because of (OMV's natural gas hub in) Baumgarten,” Nagy added.
Nagy added that it is up to the merging firms to propose solutions to ease competition concerns and the watchdog itself would not make recommendations.
Its position is similar to that of the government, which has said it would use all of its muscle to prevent the takeover.
Last year it passed a law dubbed lex-MOL, which makes it more difficult to take over firms considered strategic.
That prompted the EC to take action against Hungary over restriction of free movement of capital.
The GVH may also come under pressure from the European Union as Brussels jealously guards its exclusive authority over large, cross-border deals and recently took action against countries not complying with its decisions. (Reuters)