Acron increases stake in Poland’s Grupa Azoty to 20%

11 June 2014 14:31 Source:ICIS News

LONDON (ICIS)--Acron has increased its stake in Poland’s Grupa Azoty to 20%, the Russia-based fertilizer producer said on Wednesday, increasing its influence over a company it has attempted to take over in the past.

The company said last year that it was looking to build up its stake in the chemicals producer to 20% from its previous holding of 15.3% in September last year, a move that the Polish government – the key stakeholder in Grupa Azoty - has opposed.

“Poland does not wish to over-expose its strategic companies to Russian energy policy. We have not encouraged, and we will not be encouraging, Acron to build up its stake in Azoty,” a ministry source told ICIS in October 2013.

The Polish government’s opposition to Acron strengthening its hold on Azoty has been such that limiting the Russian company’s influence was a factor in selling a 5.75% stake in the business to the European Bank of reconstruction and Development (EBRD) and a 6.33% stake to a group of institutional investors last year.

Sources said in April 2013 that part of the decision to sell off the stakes was based on the idea that it would help to prevent Acron from building up its stake in Azoty – known at the time as Zaklady Azoty Tarnow (ZAT) – in preparation for a potential hostile takeover of the business.

Acron had made an offer of nearly half a billion euros for a 66% stake in ZAT in mid-2012, an offer that was derailed by a decision to merge ZAT with fellow local company Zaklady Azatowe Pulawy (ZAP).

The government has also taken steps to limit shareholder influence on the company by setting a 20% ceiling on the amount of Azoty stock other investors can own, but the increased stake is likely to increase Acron’s access to the the company’s documents and know-how, according to investment bank WOOD & Company.

“We highly estimate the synergy potential of undertaken consolidation of Grupa Azoty assets and see the prospects for cost reduction and resource optimisation. We also count on the strategic partnership between Acron Group and Grupa Azoty, which will contribute to the sustainable and effective development of both companies,” Acron vice president Vladimir Kantor said.

By Tom Brown