The Romanian Competition Council (CC) has approved the deal under which petrochemicals producer Oltchim Ramnicu-Valcea will take over the petrochemical activity previously owned by oil and gas producer Petrom. The assets acquired are located on the industrial platform Arpechim, where Petrom will continue to carry out oil refining activities.
“The council has examined whether this move is compatible with a normal competitive environment and concluded that it does not result in significant restriction, prevention or distortion of competition,” announced officials from the Competition Council.
Since November 2008, production activity in sites purchased by Oltchim has been halted and plants were temporarily closed up. Production activity will be resumed after the handover from Petrom. “This merger represents a vertical integration of economic activity in the petrochemical sector. Moreover, Arpechim’s petrochemical activity was designed from the beginning to provide an integrated system to combine work with Oltchim,” said the CC. The approximately 560 Arpechim employees engaged in petrochemical activity will be transferred to Oltchim.
Currently, the firm is working at low capacity, as its activity depends largely on Arpechim’s activity. Since November 2008, Petrom has stopped deliveries of ethylene and propylene from Arpechim to Oltchim.
To help the firm, in July 2009 the government approved a mechanism for the taking out of a loan of EUR 339.2 million, which will be up to 80 percent guaranteed by the state.