On June 26, 2014, PM Medvedev chaired the first 2014 meeting of the Commission on Foreign Investment. At the meeting, several deals were discussed/approved and amendments to the Strategic Sectors Law were discussed.
According to public sources, the following deals were addressed:
- Fresenius Kabi (Germany) -> Binnopharm/Alium – the German-based Fresenius Kabi purchased stakes in Binnopharm and Alium from Sistema JSFC and other shareholders. The acquired companies manufacture pharmaceuticals in Russia such as Combivir (HIV treatment), Salbutamol (asthma), and Erythopoietin (anemia). Fresenius Kabi will own 51 percent of a joint venture that will hold 100 percent of the companies’ shares (Sistema will retain 37 percent and Zenitko 12 percent).
- Palfinger (Austria) -> Velmash – Palfinger of Austria together with Steindl Forsttechnik GmbH purchased respectively 60 percent and 20 percent interests in Velmash, a Russian manufacturer of hydraulic loading and unloading equipment. The remaining 20 percent will be held by PMHJ Holding Global Ltd., about which there is literally no information on the internet. I suspect it is either
- EuroChem (Russia*) -> Astrakhan Oil & Gas Company – EuroChem (ЕвроХим) is purchasing the Astrakhan O&G Company (ANGK). The deal was subject to the Strategic Sectors Law despite the beneficial owner of EuroChem (Andrey Melnichenko) being Russian because, as usual, the transaction was done through various offshore trusts/companies. FAS had previously delayed the deal over competition law concerns. In February of this year, EuroChem acquired 20.1 percent of ANGK for RUR 1.34 billion (USD 38.09 million). The previous owners of ANGK were Gazprombank and the Federal Agency for State Property Management.
- Abbott Laboratories (U.S.) -> Veropharm – the meeting touched on an application by Abbott to purchase an ownership stake in Veropharm (Верофарм) for USD 495 million from OOO “GardenHills” (ООО ГарденХиллс”), a holding company owned by Roman Andreev with 80 percent of the shares Veropharm. GardenHills recently purchased most of the outstanding shares, which previously traded freely on the RTS. FAS head Igor Artemev stated that Abbott submitted an ‘incomplete application’ and had inquired about the missing documents, which prevented the commission from approving the deal that day. Artemev alluded to a deal from 2013 that the commission denied – Abbott’s proposed acquisition of Petrovaks – but added that he thinks the Veropharm transaction will be a success.
Proposed Amendments to Strategic Sectors Law
Artemev also summarized developments with proposed amendments to the Strategic Sectors Law, which have been dragging out for quite some time. The draft law has already been approved in the first reading, and the second/third readings – which will contain a number of amendments – are scheduled to be done later this year. Here is a copy of the latest version of the amendments, which you can track here.