Following Croatia’s announcement that it is looking to sell more of its stake in state oil company INA, MOL and OMV have both shown an interest. However, as the companies attempt to try to assert de facto dominance in south-eastern Europe by buying a controlling stake in the Croatian oil major, MOL’s expansion plans may be hampered by OMV’s ongoing efforts to purchase its Hungarian counterpart.

Although Hungary’s MOL recently successfully fought off a hostile takeover bid from Austria’s OMV, it has been left weakened at an inconvenient time. Indeed, while MOL’s long-time ambition to acquire INA may become a reality at the end of October, when the moratorium on the firm acquiring further shares in the Croatian state oil company will expire, MOL will have to make a significant financial outlay to achieve this goal.

The Croatian government is reportedly keen to sell to MOL, which already holds a 25% stake in INA. However, should MOL have insufficient funds to make this purchase following its recent efforts to see off OMV’s hostile advances in June, the shares will have to be sold on the open market. It is unlikely that the sale will not take place, as Croatia will need to divest all but 25% of INA’s shares in order to fulfill an EU accession criterion.

OMV has built up a considerable war-chest with which it could push up the market price of INA shares, further extending the financial outlay that MOL will have to make. Furthermore, should MOL be perceived to be paying far over the odds for INA, its own share price may be weakened, thus increasing its vulnerability to any approach from OMV. OMV has already acquired a 20% stake in MOL, but questions remain regarding how much more the Hungarian government would be happy for the Austrian firm to acquire, or what the government could do to prevent OMV from increasing its stake.

While MOL is eager to increase its stake in INA to a controlling one, and may have the perfect opportunity to do this following the Croatian government’s announcement, the Hungarian firm has only a short time to try to firm up its finances. This would allow it to achieve its ambition of being the most influential market player in the region, which would see much of the energy imported into the EU pass through it. However, OMV is unlikely to take this lying down, and so a waiting game will ensue.

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