Published: March 28, 2011
State bank prepares for privatisation with IB deal.
Sberbank is to become a universal bank after reaching an agreement to buy investment bank Troika Dialog for US$1bn in cash.
Russian’s largest bank, which has assets worth US$260bn, will combine its commercial and retail operations with its compatriot’s investment banking capabilities.
The terms of the deal include an earn-out based on an increase in Troika’s value by the end of 2013.
State-owned Sberbank will buy the 63.6% stake held by a group led by Troika’s chairman and chief executive Ruben Vardanyan. It will also take the 36.4% owned by South Africa’s Standard Bank, some two years after it invested US$300mn in the bank.
“Given the huge amount of business that is likely to flow from Sberbank into Troika over the next few years it is understandable that Sberbank desires to own 100% and not allow us to stay in as a minority shareholder,” Jacko Maree, Standard Bank’s chief executive, says.
Following the sale Vardanian remains Troika’s chief executive at least until 2013 with Herman Gref, Sberbank’s chief executive, becoming chairman of Troika’s board.
Gref said that the deal will offer modern financial services to more than 80,000 small Russian companies that have until now lacked such possibilities. “In the next three to five years we will create the leading Russian participant of the corporate and investment banking services market, taking first and second place on the market for each product line.”
Sberbank and Troika are believed to be targeted by Russia’s government to raise RUR1tn (US$34bn) in a three year privatisation process. The government raised US$3.3bn in February selling 10% of VTB.
The transaction is subject to several regulatory approvals. Completion is expected to be in the last quarter of 2011.