Ukrainian government considers merging Ukrnafta and Ukrtatnafta

The Ukrainian government announced plans to create a vertically-integrated oil group by merging Ukrnafta (UX: UNAF UK) and Ukrtatnafta, Kommersant reported yesterday. The merger would unite Ukrnafta’s service station network with Ukrtatnafta’s refining capacities. The new entity would fall under the control of Naftogaz which owns 51% of Ukrnafta and 43% of Ukrtatnafta. Despite its potential synergies, the merger could prove difficult to realize due to possible obstructions from Privat Group, which controls a significant 43% stake in Ukrnafta and 46.9% stake in Ukrtatnafta.