Poland’s largest chemical holding Grupa Azoty has been reported to be looking at making investments in the fertilizer sector in Poland as well as in Croatia, the EU’s newest member.
Grupa Azoty is the second-largest fertilizer producer in Europe
Courtesy of ZA Puławy
Last week it was reported by daily Rzeczpospolita that Azoty, which is currently Europe’s second-largest fertilizer producer, could acquire Croatian sector company Petrokemija. The Croatian government, which owns the company, has started looking for a strategic investor for the company. Grupa Azoty has so far declined to comment on the alleged takeover bid.
Analysts value Petrokemija at about zł.325 million. Grupa Azoty would have to pay at least half of that amount to gain control over the Croatian firm.
Petrokemija is a producer of fertilizers, carbon black and clay-based products. Its annual revenue amounts to about zł.1.6 billion. It has been recording net losses for the past few years, making it a prime target for foreign investment, made that much easier due to the Balkan country’s accession to the European Union earlier this year.
Keeping it domestic
While Azoty’s foreign expansion would help boost its strong market share Europe-wide, at home the chemical giant is also looking at investments to protect its holdings from foreign takeover bids.
Grupa Azoty may take over the fertilizer production assets of Anwil, currently a unit of oil group PKN Orlen, business daily Puls Biznesu reported last week. The paper’s sources said that the companies and the State Treasury are in joint talks on the issue, although lips are sealed as to the details of any eventual sale.
This is not the first time Anwil, based in Włocławek, has been eyed up for purchase. Chemical firm Puławy, now part of Grupa Azoty, in the past wanted to buy Anwil, then valued at zł.2 billion. The sale fell through, however.
The possible takeover additionally has a political dimension as part of the company’s strategy to protect Grupa Azoty from a takeover bid by Russia’s Akron. The Russian chemical holding now has a 15.34 percent stake in Grupa Azoty and in 2012 it made a hostile bid, albeit unsuccessfully, to acquire Azoty Tarnów, the company that later became the core of the Azoty group.
Furthermore, the Polish government sees Grupa Azoty as a strategic asset, and as such is committed to a form of defense strategy to stop the holding from being taken over by foreign capital.
Meanwhile, Orlen’s CFO Sławomir Jędrzejczyk said in a conference call on Wednesday that the company is not in the process of being sold.
However, he added, “We treat fertilizers as non-core activity. ... Any form of cooperation with anyone interested is possible.”
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