Mergers: Commission clears acquisition of OMV Slovenija by MOL, subject to conditions
The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of OMV Slovenija by MOL. The approval is conditional on the divesture of 39 fuel stations in Slovenia to the Shell Group.
Today's decision follows an in-depth investigation of the proposed acquisition of OMV Slovenija by MOL. MOL and OMV Slovenija are, respectively, the third and second largest retail fuel suppliers in Slovenia, right after Petrol (i.e. the national leading motor fuel retailer).
The Commission's investigation
During its in-depth investigation, the Commission gathered extensive information and received feedback from market participants and other stakeholders.
Following its market investigation, the Commission had concerns that the transaction, as initially notified, would harm competition in the retail supply of motor fuels (gasoline and diesel) to individuals in Slovenia. In particular, the transaction would:
- Reduce from three to two the number of significant retail motor fuel operators in Slovenia in a market with high barriers to entry and expand. Given that the merging parties currently compete head-to-head in many local areas throughout Slovenia and the competitors other than Petrol are significantly smaller, the transaction would remove the main competitive constraint that MOL and Petrol currently face in the market;
- Significantly reduce competition in the market for the retail sale of motor fuel to individuals from non-motorway fuel stations in Slovenia, given that MOL and OMV Slovenija are very close competitors;
- Increase the likelihood of coordination on the retail motor fuel market between MOL and Petrol.
To address the Commission's competition concerns, MOL offered to divest a nationwide retail network of 39 fuel stations in Slovenia, currently operating as part of the fuel station networks of both MOL and OMV Slovenija, to the Shell Group.
The Shell Group, a large global group of energy and petrochemical companies, currently operates a network of nine stations in Slovenia, eight of which are dedicated to trucks.
These commitments fully address the competition concerns identified by the Commission. Feedback received from customers and competitors in the market test of the proposed commitments confirmed the Commission's view that the divested assets constitute a viable business that would enable the Shell Group to effectively compete with the merged entity.
The Commission therefore concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.
Companies and products
MOL Hungarian Oil and Gas Plc (‘MOL'), headquartered in Hungary, is the parent company of the MOL Group, an integrated oil and gas group whose principal activities are (i) the exploration, production and refining of crude oil; and (ii) the distribution of refined oil products. At the retail level, MOL Group has a network of around 2,000 fuel stations in nine countries (Hungary, Romania, Republic of Serbia, Montenegro, Republic of Bosnia-Herzegovina, Republic of Croatia, Republic of Slovenia, Czech Republic and Slovakia). In Slovenia, MOL operates 53 fuel stations offering a range of standard and premium fuels and various other ancillary products and services.
OMV Slovenija Trgovina Z Nafto In Naftnimi Derivati, D.O.O. (‘OMV Slovenija'), headquartered in Slovenia, is active in the retail sale of motor fuel via its network of 119 fuel stations. OMV Slovenija's fuel stations offer a range of standard and premium fuels, automotive LPG, heating oil and various ancillary products and services. OMV Slovenija is also active (i) on the fuel wholesale markets, supplying some customers in Slovenia and Croatia; and (ii) in the wholesale supply of bitumen and heating oil.
Merger control rules and procedure
The transaction was notified to the Commission on 13 May 2022 and the Commission opened an in-depth investigation on 22 June 2022.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
There are currently six Phase II merger investigations: (i) the proposed acquisition of eTraveli by Booking; (ii) the proposed acquisition of Lagardère by Vivendi,(iii) the proposed acquisition of VMware by Broadcom; (iv) the proposed acquisition of Inmarsat by Viasat; (v) the proposed acquisition of Asiana by Korean Air: and (vi) the proposed creation of a joint venture by Orange and MasMovil.
More information will be available on the competition website, in the Commission's public case register under the case number M.10438.