OMVSeeks EU Approval for Hostile Takeover of Hungary's MOL

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OMV AG, Central Europe's largest oil and gas company, has asked EU regulators to approve its hostile bid for Hungary's MOL, the European Commission said Friday, AP is reporting.

The Hungarian government fiercely opposes the foreign bid for the oil company it claims as a national treasure.

The EU set an initial deadline of March 6 to examine how the deal would affect competition in the region. If it identifies problems, companies may sell off units or make other changes to eliminate antitrust worries to avoid the EU blocking a bid.

Austrian-based OMV currently owns a 20.2 percent stake in MOL and says the deal would benefit shareholders of both companies as well as Hungary. OMV's buyout offer — valued at about €14 billion (US$20.8 billion) — would boost its standing as a major player in the global oil and gas market.

It launched a lawsuit in December seeking to abolish a Hungarian rule capping the voting rights of all MOL shareholders at 10 percent — no matter how big their stake. The EU's highest court last year ruled as illegal a similar German rule capping voting at carmaker Volkswagen AG.

OMV said it is ready to make concessions to Budapest, allowing the Hungarian government to sit on the supervisory board and locating the headquarters of its major Hungarian operations in the country.

A bigger company would be better, it said Friday, because it "would have the scale to compete more effectively with Europe's major integrated oil and gas companies, positioning it to benefit from enhanced growth opportunities."

It stressed that the combined company would also secure energy supplies for Europeans worried about rising oil prices and strained relations with its largest foreign gas supplier, Russia.

OMV said it was committed to help build the EU-backed Nabucco pipeline, which is to carry gas from Middle Eastern and Caspian countries, other than Russia, via Turkey to Europe.

Last spring, OMV angered the U.S. government by announcing a preliminary agreement with Iranian officials to develop Iran's Pars gas fields. Washington warned that the deal would undermine sanctions against Iran meant to keep it from obtaining nuclear weaponry.

After Russia, Iran has the world's biggest reserves of natural gas, an energy source Europe is increasingly turning to for electricity generation in an effort to reduce greenhouse gas emissions.

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