The Orlen group continues the consolidation processes initiated after the company finalized the acquisitions of Lotos and PGNiG. “The main assumption is the integration of business areas with the same or similar business scope. Currently, the most advanced processes are business integration, including: design and insurance,” Orlen’s press office informs us. He adds that the form and mode of consolidation each time depend on business needs and goals. The assumption of these reorganizations is to simplify the group structure, reduce costs, exchange good practices and experiences, and generate operational and financial synergies.
Not all consolidation projects are financial in nature
So far, Orlen has merged companies and other assets: service (Lotos Serwis and Orlen), venture capital (Orlen VC and PGNiG Ventures), railway (Lotos Kolej and Orlen KolTrans), oil (Lotos Oil and Orlen Oil) and security (Lotos Ochrona and Orlen Security). There was also a consolidation of the Norwegian mining assets of the Lotos group and PGNiG. “Not all identified projects are financial in nature. There are also those that bring measurable qualitative benefits, e.g. they streamline operations, increase the efficiency of some processes, and contribute to greater safety,” argues Orlen.
Orlen still counts on billions from the takeover of Lotos and PGNiG
The value of synergy obtained thanks to the merger of the three concerns already amounts to PLN 2.2 billion. Orlen maintains that their total amount will reach PLN 20 billion. Moreover, it is to happen sooner than by 2032. Analysts do not see any chance for large synergies.
However, some consolidation processes are progressing slowly, which is a consequence of many factors, often beyond the concern’s control. A good example here is the project of integrating domestic mining assets, which before the mergers were located in the Orlen, Lotos and PGNiG groups. “Taking into account the strong dependence of the integration processes of these assets on regulatory aspects related to, among others, with various concessions, the integration process requires taking actions at several levels: operational, regulatory, environmental, etc. We expect that a significant part of the processes related to the consolidation of mining assets will take place in the first quarter of 2025.” – says Orlen’s press office.
