Who is MVM, the Hungarian state company that wants to buy gas and power supplier E.ON: It depends heavily on Russian gas and operates the Paks nuclear power plant with Russian technology

The company MVM, which is owned by the Hungarian state, reached an agreement with the German company E.ON to buy gas and electricity supply operations in Romania. MVM is the power arm of Viktor Orban’s government and has strong cooperation with Russian state companies, despite Russia’s isolation from the international community in response to the invasion of Ukraine.

The deal between MVM and E.ON was first reported G4Media and Economedia. The transaction would be officially announced after the presidential and parliamentary elections, so that it would not create political tension related to the relationship between Hungary and Russia, according to G4Media sources.

• UPDATE Sources say for Economedia that the E.ON group has not yet made a final decision to sell the Romanian supply. “In line with its strategy, E.ON is constantly reviewing its portfolio to advance its strategic agenda for sustainability, digitization and growth. In this context, E.ON is carrying out a strategic review of its sales activity in Romania, as it said at the beginning of this year. This strategic review has not yet been completed and no sale agreement has been reached. We will not comment further until the strategic review is complete. The strategic review does not refer to DELGAZ”, is the opinion of the representatives of the company, unchanged from March.

The Hungarian government is the sole shareholder of MVM, according to independent rating agency Fitch. Research published Inside the Balkans of 2023 shows that MVM is the company through which Viktor Orban’s government is trying to expand its economic influence in Central and Eastern Europe.

In Hungary, MVM controls almost the entire gas and electricity supply and distribution market, as it is a strategic company. MVM has bought a number of businesses in the area in the past ten years, including the German company E.ON’s operations in Hungary.

Like the Orban government, MVM has a very close relationship with Russia.

Fitch Ratings wrote in a June 2024 assessment that “MVM is highly exposed to Russian gas imports as a recipient of a long-term import contract with Gazprom. Russian gas continues to reach Hungary through interconnections with Serbia and, to a limited extent, from Austria.”

In other words, MVM’s business depends on Gazprom, a company controlled by the Kremlin and constantly used by Vladimir Putin’s regime as a tool of political pressure.

Another MVM business relationship with Russia is at the Paks nuclear power plant, which it operates through the MVM subsidiary Paksi Atomerömű Zrt.

The Paks plant has four VVER 440 reactors that were built in Russia and run on Russian nuclear fuel.

In addition, the Orban government wants to build two new reactors of the Paks nuclear power plant together with the Russian company Rosatom, despite partial opposition from the European Commission.

If the transaction between MVM and E.ON is approved by the management of both companies, it must also be approved by the Competition Council, but also by the Commission for the investigation of foreign direct investments.

We remind you that Romgaz, a company controlled by the Romanian government, was also interested in acquiring E.ON Furnizare, but the deal was not completed, according to G4Media information.

In the past Romania has stopped the desired construction by Hungarian companies in Romania. This is the case of Banca OTP, which wanted to buy Banca Românească from a Greek group, but the BNR stopped the transaction. At the time, the BNR had questions about the source of the money with which OTP wanted to make the purchase, because there were indications that it was the capital of Russia.

Recently, the Spanish government also rejected a construction wanted by Hungary because of Budapest’s ties to Russia. In August, the Spanish government blocked a public takeover bid launched by the Hungarian consortium Ganz Mavag Europe for Spanish railway builder Talgo, judging that the transaction would create “risks”. for national security and public order”.