A go-ahead for the consolidation

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On the 18th of January 1930, the National Nitrate Fertilizers Factory opened in Tarnów. 83 years later, the European Commission issued an approval for the merger of Pulawy Company and Azoty Tarnów. A new chapter in the history of Polish chemical industry began.

Patience pays off

The preparations for the merger had continued for a long period of time, and yet the milestone in the process was the signing of the consolidation agreement on the 20th of September 2012. Since January 18th, the merger has been sure to succeed. The European Commission had received no remarks concerning serious doubts in connection with the planned merger of the two enterprises. From this moment on, Azoty Group, which has formally existed since the 5th of December 2012 r., has also included one of the main companies from the Great Chemical Synthesis sector – “PUŁAWY” Capital Group.

 

Mutual benefits

The key added value coming from the consolidation is synergistic effect. The increase of the value of the merged companies brings tangible benefits not only for the shareholders. First and foremost, Azoty Group is going to be the leader on the Polish fertilizers market and the second biggest such entity in Europe. Moreover, the merger of the enterprises will help increase the efficiency of operations, including lower cost of resources (coal, electricity, natural gas), their transport (Azoty Tarnów has sourced ammonia from Police, now it will be possible to send it from Puławy, which is nearer than Police), development of a distribution network and increasing the joint portfolio of products. Those assets will enable the Group to improve its position and competitive edge on the market of tenders organized in Poland, Europe and the whole world.

 

Efficiency first

Both companies are not only important players on the global chemicals market, but also well-managed enterprises. In the last two years they have worked up impressive financial results. In financial year 2011/2012, the profit of “PUŁAWY” reached 600 million PLN, the highest in the company’s history, while the profit of Azoty Tarnów was 500 million PLN in 2011. The Minister of Treasury Mikołaj Budzanowski, commenting on the European Commission’s decision, expressed an opinion that it is a confirmation of the judicious direction of development of the Polish economy, aiming at consolidation in the chemical sector. The Minister has highlighted the fact that since the consolidation began, the joint value of both companies’ stock reached 1.7 billion PLN, rising by 38%. This marks good forecast in the context of operating results of Azoty Group and return on investment for shareholders. Are we able to face the challenges of contemporary chemicals market? There can only be one answer: “Yes, we can!”