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WARSAW: Following the sale of a 5.1 percent stake in Poland's largest rail operator PKP Cargo by the European Bank for Reconstruction and Development, PKP is to acquire 49 percent of competitor Pol-Miedź Trans (PMT), a subsidiary of mining conglomerate KGHM Polska Miedź (KGHM).

PKP says it expects the cash and in-kind deal – which is subject to final due diligence and approval by Poland's Office of Competition and Consumer Protection – to be completed by the second quarter of 2015.

PMT, with 63 locomotives and 1,550 wagons, controls 2.4 percent of the Polish rail freight services market. The move by KGHM is part of a plan to focus on its core mining operations in Poland, Canada, Chile and the U.S. where it extracts copper, silver and other metals.

Pol Miedz TransCommenting on the acquisition, KGHM management board president Herbert Wirth said: "An industry partner for our railway operations will enable us to reduce investment in this area while strengthening PMT's position on the railway freight market." He added that PMT's road transport and fuel trade business is not part of the deal.

PKP says its investment in PMT means a broadening of its customer base and the ability to use its rolling stock more efficiently: "Cooperation with KGHM is a perfect example of our strategy to strengthen PKP Cargo's market position domestically and improving our offerings for large industrial groups that operate their own railway freight services. Using our high-quality services, rolling stock and know-how, we can work together to develop highly beneficial synergies for all stakeholders," said CEO Adam Purwin.

In a related move, PKP has acquired 100 percent of PS Trade Trans, a Polish logistics company that operates nine terminals throughout the country handling wood and wooden products, metals and metal products, black coal, brown coal, and coke.

Purwin added: "Full integration of the Poland's largest rail freight carrier with one of the largest forwarding companies in the sector will allow further development of PKP Cargo, while the experience gained by PS Trade Trans on international markets will allow us to expand our contact network."

Founded in 2001, PKP operates 1,000 trains in Poland plus additional services in Slovakia, Czech Republic, Germany, Austria, Belgium, the Netherlands and Hungary. Subsidiaries include Cargosped (intermodal operations), PS Trade Trans (local and international rail shipments), and PKP CargoTabor (rolling stock operator).

In 2013 the company transported 114 million tonnes and reported revenues of PLN 4.8 billion (US$1.3 billion) and a net profit of PLN 65 million (US$17.58 million).

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