By Agency Reporter

TDM Limited Partnership, the 63.6 per cent controlling shareholder of Troika Dialog, led by Mr. Ruben Vardanian, Sberbank of Russia and Standard Bank Group, have agreed on the terms of Sberbank’s proposed acquisition of Troika Dialog, Standard Bank said in a statement on Friday.

Sberbank is the largest bank in Russia, Central and Eastern Europe, with approximately 30 per cent of the total assets of the Russian banking system, a market capitalisation of over $75bn and assets exceeding $260bn.

TDMP’s rationale for the transaction is to combine Troika Dialog’s leading investment banking capabilities with Sberbank’s leading commercial and retail banking platform to form a universal bank that will be strongly placed for long-term growth in Russia and the Commonwealth of Independent States, a statement from Standard Bank showed.

This will be ideally positioned for the Russian government’s recently-announced privatisation programme. Standard Bank will retain strong links to Troika Dialog and leverage its relationship with Sberbank.

Under the agreed terms, Sberbank will acquire the entire shareholding of Troika Dialog (comprising TDMP’s 63.6 per cent and Standard Bank Group’s 36.4 per cent shareholding) for an upfront cash consideration of $1bn plus an earn-out payment at the end of 2013.

Standard Bank Group will sell all of its shareholding in Troika Dialog for an initial cash amount equal to its carrying value at December 31, 2010, of $372m, and will receive an earn-out payment of approximately eighth per cent of any increase in the value of Troika Dialog as at the end of 2013.

This enables the group to participate in the growth of the value of the business over time and provides a platform for enhanced cooperation with the leading banking group in Russia.

Standard Bank Group became a significant shareholder in Troika Dialog, a leading independent Russian investment bank, in September 2009, through a transaction in which the group invested $300m in Troika Dialog (comprising cash of $200m and the net asset value of the group’s wholly-owned Russian banking subsidiary, ZAO Standard Bank, which was transferred to Troika Dialog), in exchange for its final shareholding of 36.4 per cent of Troika Dialog.

The transaction is subject to formal documentation and a number of regulatory approvals. The completion date in respect of the transaction is expected to be in the last quarter of 2011 and the initial proceeds on such disposal would be received only at that time.

In terms of the agreement, Troika Dialog will operate as a stand-alone entity within the Sberbank group of companies for the next three years. Sberbank is confident in Troika Dialog’s management team, highly values its international reputation and Troika Dialog’s strong brand appeal.

Source: Punch