Apart from organic growth, we also see potential in acquisitions. Detailed analysis of the appearing acquisition possibilities is a natural activity of each market leader. Such opportunity appeared in 2016, when EDF put up its Polish assets for sale – we thoroughly analysed assets, as well as financial capability of PGE, which assured us that we can realise the deal independently and in May 2017 we signed the agreement for purchase of EDF assets in Poland. 

As a result of the transaction, PGE Group will gain the ability to operationally manage the assets and shape their development in line with PGE's strategy. Of key importance is the capability to expand in the regulated thermal heating segment based on the acquired assets. This is also very important for us in terms of increasing operational reliability by moving towards regulated activities. This will also potentially have an impact on reducing emissions in areas where we operate.

Benefits for PGE's investors

• Transaction in line with PGE's strategy
• Increase in share of stable regulated EBITDA
• Decrease in overall operating risk for the Group
• Guaranteed leading position on the district heating market in Poland
• Fuel and geographic diversification within the country
• More effective presence in large agglomerations (outside PGE's distribution area) as a market for electricity sales - approx. 4.5 million residents within the growing agglomerations
• Cost synergies – management, fuel supplies, sales
• PGE's responsible policy - more active involvement in reducing low emissions and improving air quality

Aside from the acquisition of EDF assets, we invested in the Polish Mining Group (PGG) - an entity formed on the basis of assets acquired from Kompania Węglowa. PGG is the largest producer of hard coal in Poland and in Europe. PGE Group's total investment in PGG will reach PLN 600 million, which translates into a 15.32% stake in PGG's share capital. This investment will reduce PGE's operating risk by securing fuel supplies with parameters required by PGE's generating units and will reduce business risk by stabilising the hard coal market in Poland and lower volatility of electricity prices.

We also invested in Polimex - Mostostal, a construction company involved in building our flagship project - two new 900 MW power units. As a result of this transaction, worth approx. PLN 81 million, PGE Polska Grupa Energetyczna S.A. holds 16.48% of the company's share capital and a call option for Polimex - Mostostal shares. We believe that investing in Polimex, solid partners in the energy industry, will strengthen and stabilise this company therefore assisting it with the work being done in the energy industry.

Focusing on our core business, we decided to sell our interest in telecommunications company Exatel S.A. The PLN 368.5 million transaction was completed in 2017, and the buyer of Exatel S.A. was the State Treasury.