Austrian oil company OMV's unsolicited bid for Hungarian rival MOL faces a test on July 7 to determine if the combination may become the dominant oil player in central Europe, a MOL official confirmed on Thursday.
The issues will be aired at a closed hearing with a senior European Commission competition official, a hearing officer, which OMV may attend but need not. Either party can request such a hearing, and MOL is a direct party.
The Commission, the European Union's top competition regulator, laid out serious doubts about the planned merger in a tough statement of objections (SO), those who have seen the document say.
The SO ignores questions about natural gas and focuses on wholesale products made by oil refineries, which would include bitumen, heating oil, heavy fuel oil, diesel and gasoline, a statement by OMV showed. The two companies have been in a standoff since the summer of 2007, when OMV first indicated its takeover plans.
OMV wants to join forces with MOL amid consolidation pressure from Russia and Western majors, saying merging the two companies would improve their standing. MOL said the deal would destroy value for its shareholders.
OMV has urged the Commission to look at the bid in terms of a single regional market. MOL, however, has suggested the Commission examine the effects country by country in Austria, Hungary and Slovokia.