“The merger would remove MOL as the most significant … regional constraint on OMV, and at the same time, removes OMV as the most significant constraint on MOL,” the EU competition regulator asserts in the document, Reuters reported. The above critique regards refinery sales of diesel and gasoline in Austria, Hungary and Slovakia and is typical of the Commission’s position throughout the 134-page report, according to Reuters.

The Commission says OMV, which is making an unsolicited bid for MOL and operates the Schwechat refinery in Austria, would acquire two MOL refineries, Duna in Százhalombatta, Hungary, and Slovnaft in Bratislava, Slovakia, Reuters reported. “The competitive pressure that such contestability allows would disappear if the three refineries had a single owner,” the Commission said, according to Reuters. Such criticism raises the possibility OMV would have to divest one of the refineries to get the deal approved, Reuters wrote. The statement of objections analyses the situation product by product and country by country, examining each in detail. Its conclusions are separate for each market, Reuters reported.

The Commission says the combination as proposed could curtail competition in Austria, Hungary and Slovakia for gasoline, diesel, heating oil, heavy fuel oil and aviation fuel. It would also raise serious competition concerns for bitumen in Hungary and Slovakia and for retail sales of gasoline and diesel in Hungary, Slovakia and Romania, the Commission says, according to Reuters. Typical are the findings for the Hungarian bitumen market, where the Commission reported the transaction would give OMV the power to raise prices. Customers told the EU executive “they have two real alternatives, MOL and OMV,” Reuters reported. The statement of objections gives the natural gas market only one mention, Reuters wrote.

OMV urged the Commission to look at a market stretching from the German-Danish border and the Benelux region to the Black Sea in the southeast. It argued that production across Europe helped rein in the prices OMV and MOL can charge. The Commission, however, rejects that claim, citing price differences of 10% across Europe. It chose national markets instead, according to Reuters. The report claims that “These price differences not only show the absence of an EEA-wide (European Economic Area) market as claimed by OMV,” but demonstrate the lack of interest of the western European producers in central European markets, Reuters said.

Throughout the statement, the Commission focuses on the head-to-head competition between MOL and OMV and accepts the MOL argument that the pair are almost mirror images of each other, according to Reuters. OMV and MOL have been in a standoff since the summer of 2007, when OMV first indicated its takeover plans. (MTI-Econews)