MOL Group expands its consumer services portfolio in Poland

MOL signed a set of agreements with PKN Orlen and Grupa Lotos covering the sale and purchase of several portfolio elements within Consumer Services. Accordingly MOL acquired 417 service stations in Poland including 270 company owned sites with a country-wide coverage and the potential to reach a top 3 position in the local fuel retail market. An additional long-term agreement provides motor fuel supply for the acquired network in Poland at competitive terms.

Today’s deal provides an outstanding inorganic expansion opportunity and an excellent fit to the Consumer Services segment’s ambitious growth strategy:

1. Strategic rationale: through the completion of the acquisition MOL’s regional footprint will be further diversified and the captive market extended in the largest economy of the CEE region. The purchased set of assets would provide a basis for future growth in the country, where MOL had limited presence thus far.
2. Purchased assets: the acquired Lotos branded, Lotos Paliwa owned network captures particularly strong market positions amongst highway stations with further organic growth opportunity and significant upside to expand non-fuel sales. The transaction covers trademark licence arrangements and the takeover of fuel cards issued by Lotos Paliwa. The average throughput of the MOL service station network is expected to improve following the closing of the transaction.
3. Financial implications: the transaction is expected to have a mid-term positive annual EBITDA generation potential of around USD 70mn to the Consumer Services segment and will be financed from available liquidity. The deal would have no adverse effect to MOL’s previously communicated dividend payment capacity.

The agreed total purchase price amounts to USD 610mn, the sum of a cash consideration and a financial lease liability in relation to the purchase transaction. Closing of the transaction is subject to, among others, obtaining the approval of the European Commission.

Subject to the final approval of the above acquisition MOL divests 185 service stations to PKN Orlen located in Hungary and Slovakia for a total consideration of USD 259mn. The divested assets include 144 service stations in Hungary and 41 stations in Slovakia.

The sale and purchase prices are subject to net debt and working capital adjustments upon closing and both the deals are expected to be closed within 12 months.