Natalia Diatlova has commented for the Novy Prospect on an acquisition of Russian producer of dry mixes by European giant

Swiss company SIKA AG asked Federal Antimonopoly Service of the Russian Federation (FAS) to allow it to buy 100% of shares of Kreps LLC, a major producer of dry building mixes in St Petersburg.  

The Russian company has some financial difficulties and SIKA through the M&A deal will diversify its business, strengthen its position in the South of the country and get access to the markets of the North-Western and Central regions (if the agreement also includes a branch in Ekaterinburg, SIKA will also get access to the markets of Siberia and the Far East). The amount of the transaction may reach 250-300 million rubles.

Natalia Diatlova, Partner at Maxima Legal, explained to the Novy Prospect online publishing, that the  FAS is obliged to reply within 30 days, however this term can be extended up to two months. “In practice, a buyer’s application for the FAS approval often coincides with negotiations to negotiate the terms of the deal with the seller. But sometimes the FAS is applied to after the purchase agreement is signed, which does not come into force in the absence of approval by the antimonopoly service,” the expert explained. According to her, usually a draft contract of sale is submitted to the FAS for approval of the essential terms of the transaction. “If the antimonopoly service refuses to approve the deal, it won’t take place. But cases of refusal by the FAS in such situations are quite rare,” said Natalya Diatlova.

“It is the “time of buyers on the market of M&A with participation of foreign investors now, after the pandemic,” said Natalia. As the expert noted, foreign investors use the current situation to enlarge and localize their business in Russia and to take over Russian competitors. “The deal between SIKA and Kreps will be just such a case”, summarized Natalia Diatlova.

To read the full article (in Russian) please see the Novy Prospect website >>>