M&A November 2012

According to Czech media (15 November 2012), Russian state nuclear power corporation Rosatom may acquire a 49 per cent interest in the JV Nuclear Energy Company of Slovakia from Czech energy company ČEZ. The other partner in the JV is Slovakia’s JAVYS.

The JV is building a new power unit of the Bohunice Nuclear Power Plant project located in Slovakia.  The construction contract is worth an estimated GBP 2.4 billion. Rosatom also supplies reactors for two units being built at Slovakia’s Mochovce Nuclear Power Plant.

According to Russian business daily Kommersant (16 November 2012), US architecture, planning, management and design company  Albert Kahn Associates is participating in the construction of a rail car production plant in Lipetsk at an estimated cost of RUB 14 billion (approximately GBP 278 million), with the capacity to produce 12,000 rail cars a year.

The project is to be implemented by the company Lipetksk Rail Car Construction Plant, which has filed a corresponding request with the authorities for the right to receive the status of resident of the Lipetsk Special Economic Zone, which would provide a significant number of tax breaks.

As well as Albert Kahn Associates, investors may include two businessmen linked to the diversified holding company Sistema. If this is the case, presumably these businessmen would then sell on their interests to Sistema, which has interests ranging rom IT and telecoms, to banking and insurance, media, pharmaceuticals and oil. Sistema has also been developing a rail freight business and sought to buy 25 per cent of Russia’s largest operator Freight One, only to lose out to Vladimir Lisin’s Novolipetsk Steel.


According to the Russian business daily Kommersant (16 November 2012), the price per global depositary receipt will range from USD 20-25 during its listing on London Stock Exchange. and Moscow. As a result, the whole of MegaFon is being valued at approximately USD 11-14 billion.

Swedish telecoms operator Telia-Sonera and MegaFon Investments (owned by MegaFon) will be selling interests. After the IPO Alisher Usmanov’s AF Telecom will retain over 50 per cent of the mobile operator, with TeliaSonera holding 25 per cent minus one share.

In addition, MegaFon CEO Ivan Tavrin will own 1.25 per cent of the mobile operator through the purchase of 7.75 million shares from MegaFon Investments within one month of the IPO.


According to the Russian business daily Vedomosti (12 November 2012), Prosperity Capital Management owns 14.43 million ADRs in  VimpelCom, worth an estimated USD 171.6 million and equivalent to a voting share of 0.7 per cent in the mobile operator.

As a result, the investment fund is the operator’s third largest shareholder after Altimo (47.85 per cent voting shares) and Telenor (42.95 per cent).

Until the end of July France’s Natixis was the third largest shareholder, only to sell its interest to Altimo. Subsequently Prosperity Capital Management raised its interest.

According to Russian business daily Vedomosti (8 November 2012), a company linked to Renova Group, majority owned by Victor Vekselberg, has acquired approximately 4 per cent of Novelos Therapeutics for USD 2 million in a private placement, to be transferred subsequently to an investment fund created by a group that will invest in biomedical projects. Renova also received the right to increase its interest to 10 per cent.  US-based Novelos Therapeutics develops novel drugs for the treatment and diagnosis of cancer.

Novelos plans to spend the proceeds on the construction of an in-house clinical stage manufacturing facility for its drugs, to be completed wihhin a year and at a cost of approximately USD 3 million.

According to the Minister of Health Veronika Skvortsova, cancer was the cause of 14.4 per cent of deaths in 2010.

According to Russian business daily Kommersant (8 November 2012), Evraz Group plans to sell its captive transport operator EvrazTrans to Neftetransservice owned to the Aminov brothers for an estimated USD 300 million. The vertically integrated steel, mining and vanadium business has also sold together with the transport operator a long-term contract for a third of its carriage requirements.

EvrazTrans owned over 4,800 rail cars at the end of 2011 and transported 19 million tonnes of freight in 2011, with revenues of RUB 4.3 billion and net profits of RUB 2 billion. Neftetransservice is one of the top three private rail car operators in Russia.

As reported by Russian business daily Vedomosti on 6 November 2012,  VTB Group may buy 25 per cent plus one share in pay TV operator Tricolor (known shareholder – Andrei Tkachenko) for as much as USD 200 million. The company received the consent of the Federal Antimonopoly Service in the summer to increase its interest in National Satellite Company from 37.4 per cent to 87.4 per cent of the shares.

The pay TV operator ha an estimated 12 million subscribers. Tricolor has been looking for investor for a whole, with Gazprom Media walking away from a deal at the last minute in 2009. It is unclear why VTB needs the asset and according to analysts it may well pay overpaying for the asset, in line with past history (the purchase of the Bank of Moscow is just one example that springs to mind).