Poland laid out plans on Tuesday to merge four of its largest energy groups in a move the government hopes will create a player able to compete in international oil, gas and electricity markets.
PKN Orlen, the country's largest refiner on Tuesday received conditional EU antitrust approval to take over smaller rival Lotos, and also said it planned to buy Poland's largest gas company PGNiG. Earlier this year, PKN Orlen had acquired utility Energa.
"We are building a powerful global multi-energy group in Poland," said State Assets Minister Jacek Sasin.
Since coming to power in 2015, Poland's conservative Law and Justice party (PiS) has sought to increase state control over the economy, while reducing the role of foreign investors.
Polish Prime Minister Mateusz Morawiecki said that the combined energy group could generate earnings before interest, taxes, depreciation and amortization (EBITDA) of as much as 20 billion zlotys ($5.07 billion).
He said the merger with Lotos would not mean job cuts.
"We have aspirations not only to operate in Poland, but also operate very strongly in the region," PKN Orlen chief executive Daniel Obajtek said before signing a letter of intent to buy the state's stake in PGNiG.
PGNiG's shares were up 3.6% and Lotos shares were up 6.6% at 1100 GMT.
PKN Orlen's Obajtek said that as a condition of getting EU approval for the Lotos deal, the company had agreed to sell some of its petrol stations in Poland, but it was also planning to swap assets with competitors in other parts of Europe.
(Reporting by Anna Koper, Pawel Florkiewicz and Gdansk Newsroom; Writing by Alan Charlish. Editing by Jane Merriman)