Further to Current Report No. 21/2020 of July 14th 2020 on a positive conditional decision of the European Commission to acquire control of Grupa LOTOS S.A. (the “Company”) by PKN ORLEN S.A. (“PKN ORLEN”), the Company announces that on May 12th 2021 it entered into a Cooperation Agreement (the “Agreement”) with PKN Orlen S.A., PGNiG S.A. (“PGNiG”) and the State Treasury (the “Parties”) concerning the recommended scenario for consolidation of PKN ORLEN, PGNiG and the Company.

As at the date of the Agreement, the adopted scenario for acquisition by PKN ORLEN of control of Grupa LOTOS and PGNiG (the “Acquirees") is to merge PKN ORLEN and the Acquirees pursuant to Art. 492.1.1 of the Commercial Companies Code, so that all assets of the Acquirees would be transferred to PKN ORLEN in exchange for shares that PKN ORLEN would issue to the shareholders of Grupa LOTOS and PGNiG as part of one or two separate merger processes.

The Agreement stipulates that, as a result of the merger or mergers, as the case may be, the shareholders of Grupa LOTOS and PGNiG will acquire new shares in the increased share capital of PKN ORLEN and become shareholders in PKN ORLEN as of the date of the merger or mergers, as the case may be.

Under the Agreement, the State Treasury and PKN ORLEN will cooperate in performing analyses to definitively confirm this scenario as optimal from the perspective of the State Treasury.

The merger of Grupa LOTOS with PKN Orlen may take place subject to the implementation of the remedies set out in the European Commission's decision to prevent adverse effects of the proposed concentration on competition on the relevant markets (for more information, see Current Report No. 21/2020).

Legal basis: Article 17 (1) of MAR – Inside information.