News (#07-08 July-August 2016)

Biznews

Mergers & Aquisitions

Microsoft buys LinkedIn

Microsoft officially announced the acquisition of professional contacts network LinkedIn for USD 26.2 billion. The LinkedIn Network will retain its own brand, culture and independence, as was promised at Microsoft. Jeff Weiner will stay as CEO of LinkedIn, he will report directly to Satya Nadella, Microsoft director.

Rod Hoffman, chairman of the Board, co-founder and major shareholder of the company, together with Weiner fully supports this agreement. It is planned to be closed by the end of this year. The operation is already anonymously supported by members of the Boards of Directors of both companies, but its complete closure depends on approval by all LinkedIn shareholders, as well as on a decision of the US antimonopoly authorities. Microsoft sold the Nokia brand earlier. The total sum of the transaction was USD 350 million. It is expected that it will be closed during the second half of 2016. LinkedIn is a social network for search and establishing of business contacts. More than 400 million users are registered in it, representing 150 business branches from 200 countries.

 

Telenor sells its share in Vimpelcom

Norwegian operator Telenor plans to sell its 33% share in telecom holding company Vimpelcom Ltd on the London Stock Exchange in September of this year. Morgan Stanley and JP Morgan, Citi and Credit Suisse, joint book-runners, are assigned as coordinators of the transaction. Banks are currently conducting securities assessment procedure. The company plans to receive at least USD 2.3 billion for its block of shares.

At the end of the II quarter Telenor accounted for Vimpelcom in its financial statements as its associated company. During the reporting period the company caused Norwegian shareholder losses in the amount of 2 billion Norwegian kroner (about USD 237 million).

The largest shareholder of Vimpelcom is LetterOne, part of Alfa Group, Mikhail Fridman and partners, — which owns a 47.9% stake.

 

Chinese consortium buys game company Playtika

A Consortium of Chinese companies, headed by Giant, came to final agreement on purchase of Israeli game company Playtika for USD 4.4 billion. The transaction must be authorized by the regulatory authorities, and it is expected that it will be closed in the third or fourth quarter of this year.

Playtika has a large representative office in Ukraine, offices in Kiev, Vinnitsa and Dnepr, where only about 300 employees work, and its total staff consists of about 1,300 people. The company offices are also located in Argentina, Australia, Belarus, Canada, Japan, Romania and the United States. The company developed Caesars Casino, Slotomania, House of Fun, Bingo Blitz and other popular games. In 2011 Playtika, then a start-up with 10 employees was purchased by Caesars Interactive Entertainment for USD 100 million.

 

Banking & Finance

Credit Suisse to create new banking business

Credit Suisse Group AG is creating a new investment banking group to serve billionaires. It is expected that Swiss bankers will consult wealthy Americans on capital markets issues, as well as on mergers and acquisitions deals. Target audience group will be business owners, entrepreneurs in oil and gas industry, biotechnology and telecommunications, whose share in company reaches hundreds of millions of dollars.

The bank will not provide services of traditional cost planning for ultra-rich clients. Instead, they will focus on lending, securities markets and services in M&A.

When the founders are ready to sell the business or make it public, they could employ Credit Suisse’s services of processing mergers and acquisitions deals and exchange offers. At the same time, the main attention will be paid to services on the territory of Asia.

 

Infrastructure

Cofco Corporation launched grain terminal

The company Cofco Agri Ukraine, which belongs to the Chinese Cofco Corporation, launched a terminal for grain and oil-producing crops in Nikolayev Region.

The Chinese governmental corporation invested USD 75 million in implementing the project. The construction lasted for 20 months — from August 2014 to April 2016.

The complex consists of two granaries and four silos. The complex also has stations for road and rail transport unloading, a variety of transportation equipment, weights, sample-collecting devices and an express laboratory. The terminal’s passport transshipment capacity is 2.5 million tons per year. Moreover, vehicle roads and areas for vehicles in port are built for the needs of a new complex.

 

Antimonopoly Committee of Ukraine

AMCU considers claim by PrivatBank

The Antimonopoly Committee of Ukraine is considering an application by PrivatBank about possible signs of violation of legislation on protection of economic competition by PJSC Ukrzaliznytsia, which involves restricting banks access to the market of buying rail tickets online.

Cooperation of the acquirer bank directly with PJSC Ukrzaliznytsia in terms of online sale of railway transportation tickets is possible only on condition of concluding a contract with Unita, which acts as a payment gateway and of fee payment to the latter in accordance with the prescribed percentage of the amount of payments received. The aim of the probe is to determine the competitive environmental status on the online rail ticket purchase market and to identify existing problems hindering development of competition.

 

Transportation

Ukrainian Aircraft Corporation

State Concern Ukroboronprom has created an aircraft cluster within its structure — Ukrainian Aircraft Corporation, which included State Enterprise Antonov, PJSC Ukrainian Scientific Research Institute of Aviation Technology (UkrRIAT), PJSC Plant Mayak, SE Novator, SE Kharkiv machine-building plant FED and SE Kharkiv Aggregate Design Bureau.

The State Concern identifies the aim of the merger as overall planning of serial production, unified center for procurement of materials and components, joint production marketing and sales support. Significant expansion of the corporation is expected In future, which is stated as an open system for enterprises of any form of ownership.

 

Oil & Gas

Yuzgas B.V. won tender for Yuzovsky field

Dutch company Yuzgas B.V. won the tender for implementing the agreement on sharing hydrocarbons, which will be produced at the Yuzovsky field.

The Shell Company, with which in January 2013 production sharing agreement (PSA) was signed, enabling the start of exploration and production of gas in the area of the Yuzovsky field, abandoned the project in Septem- ber 2015. The company planned to invest more than USD 10 billion in the field’s development. Gas reserves in Yuzovsky field could amount to 2 trillion cubic meters.

In October 2015 the company Nadra Yuzovskaya, which is the sole investor in PSA on the Yuzovsky field, announced a new tender to attract investors for the project’s implementation. Yuzgas B.V. was registered on 14 June of this year with a registered capital of EUR 1,000 specifically for the development of Yuzovsky field. Yuzgas B.V. is 100% owned by Luxembourg Fund Emerstone Energy, which is owned by the asset management company Emerstone Capital Partners (also from Luxembourg).

 

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