Editor’s Note: The following is a list compiled by the Kyiv Post of some of the most notable merger and acquisition transactions in Ukraine this year.
Ukrtelecom
It is hard to consider this year’s privatization of a 93 percent stake in fixed-line telephone monopoly Ukrtelecom as a classical M&A transaction. For one, it was a privatization deal. Secondly, controversial conditions of the privatization auction excluded many top investors from taking part. As a result, only one bidder took part.
And in the end, the market is convinced that the new owner, Austria’s EPIC, represents domestic business interests as a front. Nevertheless, Ukrtelecom was acquired by the group for $1.3 billion, making it the second largest privatization acquisition in Ukraine’s history after the 2005 $4.8 billion purchase Kryvorizhstal by Mittal Steel (Today ArcelorMittal).
Ukrtelecom’s privatization also deserves attention because the company owns Ukraine’s sole license for 3G telecommunications.
Rise, Dakor
Early this year, Oleg Bakhmatyuk’s Ukrlandfarming acquired two large agribusinesses. He is estimated to have paid about $40-50 million for Rise, which cultivates 180,000 hectares of land in Ukraine and owns a grain storage facility.
To buy Dakor, the nation’s second largest sugar producer, Bakhmatyuk is estimated to have paid about $15-20 million, a big discount considering that he agreed to pay the group’s large debts. Dakor cultivates 100,000 hectares of land and also has a grain storage facility.
Ukrros
Leading sunflower oil producer Kernel bought a 71 percent stake in Ukrros, Ukraine’s third biggest sugar producer. Kernel paid about $42 million for the equity and agreed to cover debts of $100 million.
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Cherkasy Azot
Ukrainian billionaire Dmytro Firtash is estimated to have paid about $800 million for chemical factory Cherkassy Azot.
Analysts estimate that Firtash, whose business interest span from the lucrative natural gas business to titanium and media, spent “billions” since August 2010 to acquire Cherkassy Azot and two other chemical plants: Stirol and Severodonetsk-based Azot.
All three were sold by Ukrainian businessmen. In closing the acquisitions, Firtash, who is close to the inner circle of President Viktor Yanukovych, established himself as one of the top chemical industry players in Europe.
KP Media
American publisher Jed Sunden sold KP Media, which publishes Korrespondent, a popular weekly magazine and news portal, and Bigmir.net, a leading Internet portal. The buyers are oligarch Petro Poroshenko and media magnate Boris Lozhkin. Sunden was reportedly seeking $15-18 million.
Inkerman
In January, Horizon Capital, a private equity fund, and Hartwall Capital of Finland, bought a stake in Crimea-based Inkerman, one of Ukraine’s largest wine producers. The sale price was not disclosed.
Home Credit Bank
At the end of 2010, Czech Home Credit Group exited the Ukrainian banking market by selling Home Credit Bank, a relatively small domestic bank operation, to Ukraine’s Platinum Bank. The latter is owned by Horizon Capital, East Capital and the International Finance Corporation.
Plans envision that Home Credit’s Ukrainian operations will be integrated into Platinum Bank. The transaction was closed in February 2011.
Renaissance Capital Bank
Renaissance Group sold its relatively small Ukrainian banking operation, Renaissance Capital Bank, to System Capital Management, the holding company of Ukraine’s richest man, Rinat Akhmetov. The acquisition was completed on March 11. The value of the deal has not been disclosed.
VAB Bank
In January, TBIF Financial Services, a Dutch company which represents the interests of Israeli investors, sold an 84 percent stake in Ukraine’s VAB Bank to an unknown group of foreign investors for $69 million.
According to January note to investors produced by Renaissance Capital, the new owners were represented by Troika Dialog, an investment bank that is active in Russia. The sale comes after VAB bank doubled its losses in 2010 to $78 million.
BG Bank
In February, the Bank of Georgia sold an 80 percent stake in its Ukraine’s subsidiary, BG Bank, to a group of domestic investors. The total cost of the deal, including consulting services by BG Capital, was $9.6 million. In March, BG Bank was renamed to Bank Pershyi.
