BUDAPEST (Reuters) - Hungarian state-owned energy company MVM Group expects to close its deal to buy a majority share in E.ON Energie Romania in June or July, MVM's chief executive told business
MVM Group's E.ON Romania Deal Expected to Close by Mid-Year
BUDAPEST (Reuters) - Hungarian state-owned energy company MVM Group expects to close its deal to buy a majority share in E.ON Energie Romania in June or July, MVM's chief executive told business website Portfolio.hu on Thursday.
E.ON announced the deal in December, which is subject to approval from Romanian authorities. MVM gets a large chunk of its gas from Russia, unlike energy providers in most European countries, and Romania's energy ministry said in January that the sale could be blocked on security grounds.
Romania's energy ministry said it was concerned about MVM's ties with Russia, and about the possibility that the Romanian energy provider could be sold later to an entity outside the European Union.
MVM CEO Karoly Matrai told portfolio.hu that MVM had no intention of divesting the companies it plans to acquire in Romania and said that MVM would supply its Romanian customers using local gas sources.
"Transporting Russian gas to Romania would impose enormous transit costs on us," he said.
"Since domestic supply is always the most cost-effective option, if we receive approval for the transaction, we plan to supply our Romanian subsidiary primarily from local gas sources," Matrai said.
Matrai added that MVM anticipates the necessary approvals could be secured by the end of the second quarter and "that the planned June-July closing schedule will be achievable".
E.ON Energie Romania is one of Romania's biggest gas and electricity providers, serving around 3.4 million customers.
Matrai also said that diversification was important but liquefied natural gas shipments were not competitive in price with Russian gas imported via pipeline to Hungary.
He said the company traded around 12-13 billion cubic meters of gas every year, with Russian shipments accounting for about 40% of volumes.
(Reporting by Krisztina Than and Anita Komuves. Editing by Mark Potter)
