Merger of two leading construction groups on hold since Citibank stepped in

The merger of two leading construction groups, PIA Piasecki from Kielce and Mostostal Zabrze, now looks uncertain despite existing plans to achieve the merger and to gain a new strategic investor by the end of 2002. The main shareholder in both companies Bank Handlowy (BH) has focused on selling them separately since the moment it was taken over by Citibank, which is known to be anti merger in general. Another reason against the merger is Mostostal Zabrze's deteriorating financial situation; it was recently compelled to create significant capital reserves. The postponement or suspension of the merger would be good news for PIA Piasecki shareholders, according to BGZ brokerage house analyst, Robert Chojnacki. According to an unofficial source quoted by Puls Biznesu, Swedish construction company NCC, keen to invest in a large Polish construction company by the year end, is among three firms interested in purchasing shares of PIA Piasecki. (Puls Biznesu, p. 3), M.T.