30 June 2009
Global perspectives: Merger in Hungary has players seeing red
By Cris Whetton
A row is blowing up over Russia's Surgutneftegaz apparent attempt to take over Hungary's MOL, and Croatia's government has said it has the right to buy back MOL's stake in INA Industrija Nafte if the Hungarian company is subject to a hostile takeover.
The Croatian government has the option to buy the stake under a shareholders’ agreement signed in January. Surgutneftegaz agreed to purchase 21.1% of MOL from Austria’s OMV. MOL owns 47% of Zagreb-based INA. The Croatian state owns 45%, and private investors own the rest. MOL Chief Executive Zsolt Hernadi said Surgutneftegaz could halt Hungary’s efforts to diversify gas supplies if it gained control of the company, noting he considers Surgut’s acquisition of OMV’s stake in MOL “unfriendly” and it happened without prior consultation. “If a Russian crude producer gained control of MOL, the supply security question would be reduced to one source,” Hernadi said. Eastern and Central European countries, already dependent on Russia for crude supplies, have been wary of allowing their refining industries to fall under the control of Russian companies. MOL is a partner in the Nabucco natural gas pipeline, a European project that aims to secure supplies from the Caspian region via Turkey and thus reduce dependence on Russian gas.
The deal also throws the spotlight on Surgut, a company run by Vladimir Bogdanov, an ally of Russian Prime Minister Vladimir Putin. The company has a complex ownership structure, with roughly 75% of the shares held by a labyrinth of cross-holdings that make it difficult to say who the owners are.
Cris Whetton is InTech’s European correspondent.