PKN ORLEN S.A. has become the majority shareholder of Unipetrol a.s. Holding

PKN ORLEN purchased shares equivalent to 62.99% of Unipetrol a.s. under an agreement with the National Property Fund of the Czech Republic signed on 4 June 2004. PKN ORLEN also acquired 9.76% of the shares of Spolana a.s and receivables of some of the companies of the Unipetrol Group from Ceska Konsolidacni Agentura.

This transaction strengthens PKN ORLEN's position as one of the leading Central and East European downstream oil and petrochemicals players, and further demonstrates that PKN ORLEN is spearheading consolidation in the region. The integration of both companies will allow the enlarged group to take advantage of the achievements, competence and experience of the two companies in order to strengthen the position of the whole group, increase its effectiveness and maximize synergies.

The transfer of corporate control over the Czech concern is planned for the beginning of June this year. A detailed plan for the first 100 days of the companies' integration process has been prepared. In the third quarter of this year we will present the financial model for Unipetrol, including the integration plan and possible synergies, as well as details of the initiatives already introduced.

Cezary Smorszczewski, Vice-President of PKN ORLEN, said,
- We are very happy with the successful closure of the Unipetrol transaction. The acquisition of the strategic stake in Unipetrol is opening a new era in PKN ORLEN's history. It is the next step bringing us closer to the position of regional leader in Central Europe - the position defined in our mission statement as announced earlier this year.
According to our strategy, we will treat the Czech Republic as our second home market, alongside Poland, and value creation for both the merged companies is our priority. We have reached the stage that will be hard work but also a big challenge for our companies.

In addition, Pavel Svarc, President of Unipetrol a.s. stated that:

- The successful finalization of the Unipetrol Group's privatization is the result of a several-year process of the stabilization of all the Groups' companies, in which many managers and other employees have participated. The integration of the Unipetrol and PKN Orlen groups represents a step towards the regional consolidation of companies in Central Europe, and our target is to become an important player in the chemical industry, not only in Central Europe but also globally. For the managements of both groups this means maximizing the advantages to be derived from synergies, which are mostly in the areas of operating processes, financial flows, logistics and the labour force. I believe that PKN Orlen is a good partner, which will guarantee the stable future development of the group.

Information about the transaction
On June 4th, 2004 PKN ORLEN entered into an agreement with the National Property Fund of the Czech Republic, to acquire a majority stake in Unipetrol a.s. On May 24th 2005 PKN ORLEN paid CZK 11.3 bilion for the 62.99% stake in Unipetrol, CZK 1.0 million for a 9.76% stake in Spolana and CZK 1.7 billion for receivables in companies of the Unipetrol group with a nominal value of CZK 3.1 billion, EUR 9.5 million and USD 4.9 million as of April 1, 2004.
In accordance with Czech law, PKN ORLEN will launch a mandatory tender offer to acquire the interests of minority shareholders in Unipetrol a.s. and its listed subsidiaries (Spolana a.s and Paramo a.s.). The agreement foresees a price adjustment mechanism for the shares in Unipetrol based on the difference in the adjusted net book value of Unipetrol as of the end of 2003 and at the end of the month in which PKN ORLEN acquires the 62.99% stake in Unipetrol. The price adjustment for Unipetrol shares is limited to an upward adjustment of between 5% and 15%, and a downward adjustment of 5% and 25%.
According to the agreements with ConocoPhillips Central and Eastern Europe Holdings B.V., one of the major oil and gas worldwide companies and Agrofert Holding, a.s., the second largest chemical group in the Czech Republic, PKN ORLEN, as a majority shareholder in Unipetrol will procure the sale by Unipetrol, some of Unipetrol's assets to ConocoPhillips and to Agrofert