MFB cleared for direct control of strategic gas reserve company

Initiatives

Hungary’s Competition Office (GVH) reported on Friday that the acquisition of MMBF Földgáztároló, which operates the country’s strategic gas reserves, by state-owned Hungarian Development Bank (MFB) would not breach competition policy regulations.

 

Under a contract signed on October 7, MFB will acquire 51% of MMBF from MOL, which sells its 72% stake in the company. The Hungarian Hydrocarbon Stockpiling Association (MSzKSz) will acquire 21.46%, raising its stake in MMBF to 49%.

The deal required approval by GVH because Hungarian Electricity Works (MVM), another state-owned company, recently acquired the gas storage facilities of E.ON, thus the state’s stakes in the gas storage facilities would rise further as a result of the MMBF transaction. The development bank and the electricity work are independent from the point of view of competition policy, GVH decided, citing the special competition rules applying to the independence of majority state-owned companies.

GVH classifies a majority state- or municipality-owned company independent if it has the power to independently decide on its market behavior, and, specifically, if it has the right to approve its business plans. This holds for MFB, GVH said, citing earlier experience which shows that the control of the minister exercising the state’s ownership rights over MFB is limited.

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