The acquisitions of Huta Łabędy and
Nadwiślańska Spółka Energetyczna
by Kompania Węglowa have both been approved by UOKiK,
Poland's competition authority.
The transactions are part of implementation of the
government's 'Strategy for coal mining in Poland
2007-2015', which provides funding for Kompania
Węglowa.
Kompania Węglowa (state-controlled coal concern) is mainly
involved in mining and selling coal. Its share of the European coal
market is estimated at around 13%.
The coal concern was cleared to acquire 93.33% of the share
capital in state-controlled Huta Łabędy, which
produces mainly paving stones and mine accessories. UOKiK issued a
conditional approval to this acquisition, which can go ahead
provided that Kompania Węglowa sells most of its shares to
an independent investor within at least two years. This will result
in Kompania's loss of control over Huta. In addition, Kompania
Węglowa will not be able to reduce Huta's production
to less than 80% of the current level. If these conditions are
violated UOKiK may impose a financial penalty of up to
€10,000 for each day of delay.
The economic aim of this concentration is to provide financial
security to Kompania Węglowa. Huta
Łabędy until being sold by Kompania
Węglowa will constitute the security of Kompania's
external financing. Pursuant to the UOKiK's approval, the
concentration takes the form of state aid to the Polish coal mining
sector.
Conditional approvals are extremely rare – they stand
less then 2% of this year's awarded decisions. Usually upon the
conditional approvals UOKiK imposes on the business entities
obligation to divest control over other business entity or to
dispose of the entirety or part of the assets of one or several
undertakings.
According to the second decision, Kompania Węglowa has
been cleared to take over control of Nadwiślańska
Spółka Energetyczna, company producing and
distributing of heat and water supplies as well as sewage
disposal.
Polish competition law requires UOKiK to be notified of an
intended merger where the combined turnover of the merging parties
in the preceding financial year exceeds €1 billion
worldwide or €50 million in Poland.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 21/10/2010.