Top Greek refiners Hellenic Petro-leum (Helpe) and Petrola are to merge, creating a state-controlled firm dominating three quarters of the local refinery market, Petrola said Friday in a statement to the Athens Stock Exchange.
Petrola, run by the Greek-owned Luxembourg-based Latsis business group, agreed with the Greek government to buy "around 16.65 percent" in state-controlled Helpe.
According to Greek Development minister Akis Tsohadzopoulos, Petrola will pay 326 million euros (US$381 million) for the stake.
The two parties also agreed that Helpe will absorb Petrola.
"The Greek state will retain management control in Helpe," the statement said. The transaction will be completed "as soon as possible" after shareholders' approval, the text added.
After the merger, the Latsis group will control around 25 percent of Helpe and appoint two out of the company's 13-strong management board, Tsohadzopoulos said.
Helpe is Greece's top refiner with consolidated pre-tax profit of 133.7 million euros last year. The Helpe group's core profits, defined as earnings before interest, tax, depreciation and amortization reached 286 million euros. The group also owns petrochemical operations and tank filling stations.
Helpe controls 58 percent of Greece's domestic market. It operates two refineries in Greece and one in Macedonia, three petrochemical plants in Greece. It recently expanded in Cyprus, Montenegro, Albania and Georgia.
Petrola, which controls 20 percent of the Greek market, made a pre-tax profit of 28.1 million euros last year, on 1.12-billion-euro turnover.
In February, Greece canceled the sale of a 23.5-percent stake in Helpe after year-long negotiations with a consortium comprising Latsis and Russian oil major Lukoil had collapsed.
The sale of a stake in Helpe featured featured large in Greece's declared ambition to drive down its public debt, the eurozone's second-highest, from its current level of 105.3 percent of GDP to 100.2 percent.
Helpe's trade unionists said they oppose the merger.
"Why do we buy a company we don't need? We will react. I imagine the government just wants to bail Latsis out," Helpe trade union chief Nikos Orfanos said, without saying whether staff will go on strike.
Greece's second-largest refiner Motor Oil, which controls 22 percent of the Greek oil market and is jointly owned by local Vardinoyiannis business group and Saudi oil major Aramco, criticized the move.
"It depends on the government ... if it wants privatizations or nationalizations," Motor Oil chairman Vardis Vardinoyiannis was quoted by the semi-official Athens News Agency as saying.
RSS