OMV AG , Austria's state-controlled oil company that wants to merge with rival Mol Nyrt., won't make a formal bid against the wishes of the Hungarian company's management, Bloomberg reported.
``We want a friendly combination based on the recommendation of the board of Mol,'' OMV Chief Executive Officer Wolfgang Ruttenstorfer told journalists at OMV's Vienna headquarters last night. ``A bigger entity could finance bigger projects.'' Ruttenstorfer said, adding OMV has a ``time horizon of two-to-three years'' for its merger plan.
OMV in June almost doubled its stake in Mol to 19 percent and asked for talks on an alliance. Mol and the Hungarian government rejected the offer and cited a letter from OMV raising the possibility it wanted full control of Mol. Ruttenstorfer said yesterday the companies held talks on merging and cooperating on projects for a year leading up to OMV's stake increase. Those talks led to ``very little,'' he said.
The Austrian company's June letter to Mol stated it was considering a public offer that ``would include a large cash component,'' Ruttenstorfer said. A takeover is one of several options to combine the two companies, he said.
``We believe that the dynamic consolidation in the industry will continue,'' Ruttenstorfer said. A merged company would have headquarters in Vienna and Budapest and include managers from each company.
OMV has no plans to sell its Mol stake and considers it a ``good investment,'' Ruttenstorfer said. The stake will also ``prevent others from looking at Mol.''
A merger between OMV and Mol could save as much as 4 billion euros ($5.49 billion) over 10 years, he said, rejecting Mol's claim that the two companies would have to sell a number of assets in the region because of competition concerns. ``There could be some minor conditions such as the sale of some filling stations, but there would be many buyers for that,'' Ruttenstorfer said.
Mol said yesterday it may cooperate with OMV on gas projects, yet warned ``OMV's stated intent of friendly talks is misleading and has the objective to hide the planned takeover of Mol.''