Shares in Russian pharmaceutical companies 36.6 and Veropharm surged in Monday afternoon trading on the Moscow Stock Exchange on news the competition watchdog had cleared Sistema conglomerate to buy up to 100 percent of Veropharm.
As of 2:51 p.m. Moscow time (11:51 a.m. GMT), shares in the 36.6 pharmacy retail chain jumped 6.7 percent while the stock of Russia’ third largest drugmaker Veropharm soared 9.7 percent compared with a 0.2 percent fall in the MICEX stock index.
The Federal anti-Monopoly Service announced on Monday it had allowed Sistema, a diversified holding company with interest ranging from oil to communications to buy up to 100 percent of the voting stock of Veropharm.
“The Federal Anti-Monopoly Service had made a decision to meet this petition [from Sistema] and simultaneously issue prescriptions to both Sistema and Veropharm to accomplish measures aimed at ensuring competition. This decision is effective only in conjunction with these prescriptions,” the watchdog said in a statement.
Sistema, with its Global Depository Receipts traded in London and ordinary shares circulating on the Moscow Stock Exchange, is making new acquisitions to further diversify its portfolio. Sistema’s major assets include Russia’s top mobile operator MTS and mid-sized oil firm Bashneft.
The group already wholly owns smaller pharmaceutical firm Binnopharm. Its other smaller and growing businesses include Russia's largest toy retailer Detsky Mir, retail lender MTS Bank, private healthcare company Medsi, RTI defense contractor and hi-tech business and Intourist travel operator.
Russian business media reported that the 36.6 pharmacy chain was ready to sell its 51.8 percent stake in Veropharm to pay off its debt, which amounted to 8.7 billion rubles ($270 million) in the first half of 2012.
Pharmaceutical market experts polled by Prime news agency said the 36.6 pharmacy chain could receive from $130 million to $326 million from the sale of its stake in Veropharm, depending on the premium to the asset’s market value. Veropharm’s remaining 48.2 percent of its shares are currently in free float.
Add to blog
You may place this material on your blog by copying the link.
Image Galleries: Yury Gagarin: A down-to-earth person
Infographics: The Linguistic Diversity of the Planet
Ukraine has not preserved its 1991 borders. The signing of the Geneva memorandum on April 17 reaffirmed the willingness of Russia, the United States and EU countries to reach a compromise. While the sides continue to trade tough talk and symbolic sanctions, the Kremlin and the White House are also holding a parallel dialogue on the coordinated geopolitical revision of Eastern Europe.