Poland's ZAT gains 84% of ZAP to pave way for Grupa Azoty

14 January 2013 18:13  [Source: ICIS news]

LONDON (ICIS)--Zaklady Azoty Tarnow (ZAT) has gained an 84% stake in fellow state-controlled Polish chemical group Zaklady Azotowe Pulawy (ZAP) from a share swap offer, ZAT said on Monday.

ZAT has promised to use the stake to set up a “merger of equals” with ZAP to create Grupa Azoty, which it says will be Europe's second largest fertilizer group, behind Norway-based Yara International.

ZAT, which offered 2.5 ZAT shares per ZAP share in the swap, has acquired the Polish treasury ministry's 50.7% shareholding in ZAP.

The treasury ministry thus now owns 44% of the ZAT group.

“The question remains how the treasury ministry will tackle the issue of it exceeding a 33% stake in  ZAT through the swap, which, under Polish law, now requires either the divestment of a 12% stake to 33% or the announcement of a tender for 66%,” said Piotr Drozd, an analyst at WOOD & Company investment bank.

“The first option seems counter-productive for the treasury efforts to increase control over the group to fend off an undesired takeover, while the second option requires the announcement of a tender with pricing terms not worse than during the swap,” he added, concluding that the treasury ministry would probably prefer not to reduce its shareholding in ZAT.

ZAT already trades under the Grupa Azoty brand name.

European Commission competition approval for the new group is expected by 18 January, ZAT said.

Grupa Azoty's production portfolio will include nitrogen and multi-component fertilizers, caprolactam (capro), melamine, oxo-alcohols and titanium dioxide (TiO2).

By: Will Conroy
+44 20 8652 3214

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