Motor Oil buys 90% of NRG, more takeovers, mergers seen

Motor Oil Hellas has reached a takeover agreement with independent power supplier NRG, one of the retail electricity market’s smaller players, entailing the acquisition of a 90 percent stake, the energy group has announced.

The acquisition will enable Motor Oil Hellas to enter Greece’s retail electricity market and broaden its overall presence in the country’s energy sector.

Motor Oil Hellas, a leading player in the globalized refining sector, operates one of the world’s most sophisticated and versatile refineries (Nelson Complexity Index, 11.54) and possesses a highly competent and insightful management team with a proven ability to seize opportunities in the wider energy sector.

Besides its key refining role, the group, which has continuously bolstered its portfolio, is also active in the aviation fuel, natural gas and oil exploration and production sectors.

Since its listing on the Athens bourse in 2001, Motor Oil has invested a total of 1.3 billion euros to increase production and bolster its refining infrastructure.

NRG, which grew out of the Handris energy group, began operating in 2012 and is regarded as being one of the most specialized electricity trading firms in southeast Europe.

NRG posted a total turnover of 86 million euros in 2017, up from 48.5 million euros in 2016 and 16.5 million euros in 2015. Its clientele is comprised of business groups, small to medium-sized businesses and a solid share of household consumers.

“Today is a special day for NRG and its people. I am particularly satisfied with the Motor Oil group’s vote of confidence in NRG,” noted Alexandros Handris, the chief executive at NRG. “NRG is now stronger than ever before,” he added.

The takeover deal is seen representing the first act of more acquisitions of smaller power supply companies by bigger players, as well as mergers. At least one of the country’s three vertically integrated energy firms is believed to be finalizing another takeover deal.

These developments highlight the uncertainty that has crept into Greece’s retail electricity market, especially since the increase of wholesale prices, which, combined with the imminent reduction of electricity amounts to be offered at forthcoming NOME auctions, has greatly narrowed profit margins. The main power utility PPC’s ongoing dominance has not enabled smaller suppliers to penetrate.