Poland's PKN readies Lotos concessions as EU concerns loom

By Agnieszka Barteczko and Foo Yun Chee

WARSAW/BRUSSELS (Reuters) - Polish oil refiner PKN Orlen <PKN.WA> said it is ready to present concessions on its planned Lotos <LTSP.WA> purchase once European Union competition regulators set out their concerns.

State-run PKN, which wants to buy at least 53% of Lotos, is likely to get a statement of objections from the European Commission as early as this week, people familiar with the situation told Reuters on Monday.

"We do not have official information that the Commission has issued such concerns. However, it would not be a surprise for us. If we formally receive the reservations, we will analyse them and respond, offering a formal proposal of concessions," PKN said in a statement emailed to Reuters.

The EU competition enforcer typically uses a statement of objections to list specific areas where mergers could result in higher prices or put pressure on rivals, which can spur the company making the takeover bid to offer concessions.

The Commission opened a full-scale investigation into the deal in August, saying it might lead to higher prices and restrict competition.

PKN Chief Executive Daniel Obajtek told a video conference on Monday that the Lotos deal was on track. PKN and Lotos own the only two refineries in Poland.

"It is necessary in this tough time. For the Polish economy and for the European one it is the only direction," he said, urging the EU competition watchdog to liberalise its approach.

The deal has triggered concerns from rival BP <BP.L>, which has 565 Polish petrol stations compared with PKN's 1,784 and the 496 owned by Lotos, in which Poland holds a 53.19% stake.

The Commission declined to comment.

PKN is also present in the Czech Republic, Estonia, Latvia, Lithuania and Slovakia.

Earlier the PAP news agency cited an unnamed Commission source expressing concerns that the takeover would undermine competition in the Polish retail and wholesale fuel market.

(Reporting by Foo Yun Chee in Brussels and Agnieszka Barteczko in Warsaw; Editing by Edmund Blair, Jane Merriman and Alexander Smith)