The Competition Council cleared the acquisition of control over Slovnaft a.s. (hereinafter Slovnaft) by MOL Magyar Olaj- és Gázipari Rt. (MOL).

I. The concentration concerned

On 31st March 2000 MOL concluded a contract with Slovintegra a.s. and Slovbena a.s. (S&S), the leading shareholders of Slovnaft. According to the contract, MOL became authorized to acquire 36.2% of the Slovnaft-shares by increase of capital or by purchase, further it acquired a call option for 51% of the Slovnaft-shares.

Based on this conctract, on 23rd November 2002 MOL purchased all the Slovnaft-shares of S&S which add up to the 31.6% of the capital stock of Slovnaft.

In its application, MOL primarily referred to the fact that MOL and Slovnaft were not independent from each other because of the contract from 2000 pursuant to which MOL controlled Slovnaft jointly with S&S. Furthermore, MOL applied for the authorization of the transfer of shares. In its request MOL stated that the transaction would not influence the essence of the control, just the extent of it. So, this new situation would not establish or strengthen a dominant position on the relevant market.

II. The undertakings concerned

The Slovnaft Group

The main activity of the Slovnaft Group is refining crude oil. Besides this, the Group also produces polyethylene, polypropylene and other chemical products. In addition to its manufacturing and wholesales operations, Slovnaft has filling stations in Slovakia, the Czech Republic, Poland and the Ukraine - but not in Hungary. In Hungary the Group only sells petrol to dealers.

The MOL Group
The main activity of MOL Group covers the followings:

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    exploration and production of crude oil, natural gas and gas products

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    refining, transportation, storage and distribution of crude oil products in both retail and wholesale markets

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    importation, transportation, storage and wholesale trading of natural gas and other gas products

MOL sells its products mainly on the domestic market but also exports some. MOL has filling stations in Hungary, Romania, Slovakia, the Ukraine and Slovenia. TVK Magyarország which belongs to the MOL Group, is the largest undertaking in the chemical industry of Hungary.

III. The market position of the undertakings concerned

The same activity of MOL and the Slovnaft Group is oil-refining and -trade as well as the manufacturing and trade of polyolefins. Among the other activities of the two groups there are neither overlappings nor vertical relations.

Crude oil refining and wholesale trading

Within Hungary only the MOL Group refines crude oil. The imports of crude oil are, however, liberalised and there is no real chance of appearing a new entrant on the market because of economic reasons.

The imports of crude oil products are also liberalised.

The bottleneck at this point is transportation: the reasonable maximum distance for transporting fuels and fuel oil is not longer than 250 km. This means that only from OMV`s Schwechat refinery and Slovnaft`s Bratislava refinery can they be imported. (Shell and Aral buy the fuel partly from OMV - thus, they are partially independent from MOL.)

Concerning the refineries, the possible competitors of MOL could be Petrom from Romania, Beopetrol from Serbia and Croatia`s INA. At the moment, of all the refining capacity of Central- and Eastern-Europe MOL has approximately 12 % and Slovnaft 9%.

Liquid Fuel retail market

MOL does not only sell fuels to other retailers at wholesale prices, it also puts fuel onto the market via its own filling stations. MOL`s market share was 38% on the fuel retail market in 2001 while its biggest competitors, Shell, OMV and Aral had 34% altogether.


MOL Group`s TVK is the only domestic producer but polyolefins are easy to transport. Thus, TVK exports more than half of its production to all over Europe. Nevertheless, the imports play quite an important role in the domestic market as well, approximately 30% of the domestic consumption is assured from abroad. TVK`s capacity might be seen as called considerable in the Eastern-European context, but in a European comparison it is less than 5%. Slovnaft`s capacity is considerably less than that of MOL.

IV. Application for authorization

In its application MOL expounded that the acquisition of control would only qualify as a concentration if the control were acquired through an undertaking which was independent from the acquirer. According to the standpoint of the Competition Council, a concentration of undertakings is effected where one of the undertakings exercising joint control acquires sole control. Thus, the acquisition of more than 50% of Slovnaft-shares by MOL qualifies as a concentration.

Since the joint net sales of the undertakings concerned exceeded HUF10 billion and Slovnaft`s net sales in Hungary exceeded HUF 500 million, an authorization of the concentration was required.

V. The authorization

The effects on the competition

Slovnaft is not present on the Hungarian retail market of oil products, thus no remarkable effects can be expected.

Concerning the wholesale market of oil products, besides OMV Slovnaft is the only important competitor of the MOL Group in Hungary.

Concerning the aromatic compounds and the special benzines the concentration does not endanger the competition since the importation of these products is fully liberalized.

On the Hungarian wholesale market of fuels there are 3 main actors: MOL, Slovnaft and OMV. The joint control with S&S over Slovnaft was permitted in 2000. At that time the Competition Council did not think there had been any danger of distortion of competition, rather some economies of scale on the European market were expected to arise - that`s why the joint control was cleared.

VI. The decision

The Competition Council (CC) stated that there had not been substantial changes in the market circumstances that pointed to a strenghteninh of MOL`s dominance. There was only one aspect which had to be thought over thoroughly - the wholesale market of fuels. The CC stated that the market position of MOL weakened since 2000, thus there was no danger of a disadvantageous market structure arising after MOL`s acquiring sole control over Slovnaft.

It follows from the whole of the forgoing considerations that the Competition Council cleared the acquisition of Slovnaft by MOL.