The geopolitics of merger and acquisition in the central European energy market

In September 2007 the Austrian oil and gas company, OMV, issued a declaration of intent to merge with its Hungarian competitor, MOL. The merger was regarded by MOL as a hostile takeover bid and it initiated a series of measures designed to defend its independence and position within the Central European energy market. These measures, while intended to shore up MOL’s defences in the face of an increased threat of merger and acquisition from larger companies aided by the demands of the EU to liberalise the energy market, reflect the rising instance of economic nationalism within the EU and have specific implications for the promotion of solidarity at an EU level. At the same time they also reflect the increased securitization of energy. This is important when you consider that the actions of multiple players in the battle for MOL, including Russia through involvement of Surgutneftegaz following its purchase of a series of MOL shares in March 2009, has effectively created an energy security dilemma, whereby the actions of one actor to increase its own security leads to retaliatory actions by a second actor threatened by the actions of the first. Within the Central European energy market this is happening on multiple levels and impacts the relations between EU member states, the EU and Russia. The article uses the MOL case to highlight how the geopolitics of merger and acquisition in the Central European energy market means it effectively operates in a state of persistent insecurity