PKN ORLEN one step closer to acquiring RUCH

‘As previously announced, we are pursuing acquisition processes that complement PKN ORLEN’s business and help maximise profits in the long term. We are entering a next stage of the acquisition of RUCH’s assets, which is consistent with our strategic plans for the development of our retail network. We want to maximise business synergies in order to increase the value of both companies and expand their offering for our customers,’ said Daniel Obajtek, President of the PKN ORLEN Management Board.
 
Under the investment agreement, PKN ORLEN is to become the majority shareholder of RUCH, holding a 65% stake, with PZU, PZU Życie and Alior Bank as the other shareholders. Also, Alior Bank has agreed to cancel RUCH’s debt of PLN 87.5m. The transaction is contingent upon a final court decision confirming that the arrangements between RUCH and its creditors have been implemented as part of two accelerated arrangement procedures.
 
The investment agreement provides for a Restructuring Plan for RUCH, which is based on two key assumptions: expanding the business in the direction of modern FMCG retail operations and developing courier services, while optimising the existing business lines.
 
In line with its strategy, PKN ORLEN plans to open retail and food outlets in locations other than service stations, to serve as a platform for generating synergies with RUCH. The benefits will include an expanded customer base, a broader product mix and improved product availability, and goods and services purchasing synergies.
This strategy is consistent with retail sales development trends in Central and Eastern Europe, where the pace of growth in fuel consumption has stabilised, with competition in service quality, product mix and services growing and with operating standards improving. Market research conducted by PKN ORLEN has shown potential for rolling out its format in non-service-station locations using RUCH’s assets.
 
PKN ORLEN approached RUCH with a conditional financing proposal relating to the intended acquisition of a controlling interest in the company already on April 11th 2019. This decision was preceded by a due diligence of the company and a process to work out a framework for restructuring measures. Since then, steps have been taken to adopt and approve restructuring arrangements (which were one of the pre-conditions to PKN ORLEN providing financing to RUCH). In the meantime, a detailed Restructuring Plan for the company was developed, and an investment agreement was negotiated with the other partners on the project. The investment agreement and clearance from the anti-trust regulator for PKN ORLEN to acquire control of RUCH have enabled the acquisition process to move forward.