Azernews.Az

VIENNA – Austrian gas and oil company OMV AG said it would acquire a majority stake in Turkish fuel and oil products retailer Petrol Ofisi AS, in a €1 billion ($1.39 billion) transaction aimed at making Turkey a third hub for OMV's operations.

OMV, which previously owned 41.58% of Petrol Ofisi, increased its share to 95.75% by buying the stake from Dogan Holding, a Turkish investment company.

"This acquisition is a further step in OMV's growth strategy and aims at positioning Turkey as a third hub, besides Austria and Romania, within the integrated energy Group," OMV said late Friday in a regulatory filing. "Turkey represents a strategic bridgehead to the resource-rich Caspian Region and the Middle East."

OMV said it wouldn't rule out raising equity to help fund the transaction.

Regulatory approval for the deal is expected within the next three months, OMV said. Based on the terms of the deal, OMV and Dogan have already been in talks on the Petrol Ofisi stake, but terminated these talks in November 2009. At the time, OMV said "both partners have stated from the beginning that a continuation of the existing partnership may also be a possible outcome of the negotiations."

The Dogan group is embroiled in a multibillion-dollar tax dispute with the government and is seeking to raise cash from sales of its media and other assets in order to cover the fines. Formerly the state gasoline retail company, Petrol Ofisi was privatized in 2000, but after Dogan group media clashed with the government in 2008, Petrol Ofisi failed to gain a license it applied for to build a refinery. Earlier this year, the company lost an exclusive contract to supply jetfuel to flag carrier Turkish Arirlines.

In the first half, Petrol Ofisi revenue was 7.6 billion Turkish lira ($5.33 billion), up 20% from the same period last year, according to the company. Net profit for the period was 46.6 million Turkish lira.