Acron holds out for minority stake despite ZAT/ZAP merger push

16 July 2012 16:20  [Source: ICIS news]

LONDON (ICIS)--Russia's Acron Group will examine the feasibility of taking a minority stake in Zaklady Azoty Tarnow (ZAT) despite the company's decision to oppose its takeover offer and instead push for a merger with fellow Polish chemical producer Zaklady Azotowe Pulawy (ZAP), Acron said on Monday.

Polish synthetic rubber producer Synthos, meanwhile, said it saw little chance that its bid for ZAP could succeed given that the the ZAT/ZAP merger plan had the backing of the controlling shareholder in the firms, Poland's treasury ministry.

Acron said that following the close of its zlotych (Zl) 1.96bn ($573.1m, €467.8m) offer for 66% of ZAT at the end of Monday, it would consider whether there is a business case for utilising the number of shares offered for purchase to acquire a minority stake in ZAT.

A source at Acron said the Russian mineral fertilizer producer was far from convinced that European competition regulators would approve the merger because “ZAT and ZAP together might be too much of a giant for the Polish market”.

Acron was also looking at what it believed may be serious procedural discrepancies in how ZAT had formulated the merger strategy, he said.

Although ZAT, at this stage, is not yet obliged to file a motion for merger approval from the competition regulators, it is already preparing to submit such a motion to the Polish Office of Competition and Consumer Protection (UOKiK), which it believed would be passed on to the European authorities, ZAT said.

Analysts at investment bank WOOD & Company said the competition rulings on the merger, which would create Europe's third largest fertilizer producer with annual revenues exceeding Zl 10bn, may depend on whether the regulators looked at the fertilizer market from both the Polish and European perspectives or from a purely European perspective.

If the merger goes through, the only two major fertilizer producers left in Poland would be the ZAT group and Anwil, part of the PKN Orlen group.

Approximately one-third of fertilizers used in Poland are imports, Polish Central Statistical Office figures show.

($1 = €0.82)
($1 = Zl 3.42, €1 = Zl 4.19)

By: Will Conroy
+44 20 8652 3214

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