Commodity trader Glencore Plc and Qatar’s sovereign wealth fund agreed to buy a 10.2-billion euro ($11 billion) stake in Russia’s largest oil producer from the state in a triumph for President Vladimir Putin over sanctions imposed by the West.
The surprise deal gives the buyers a 19.5 percent stake in Rosneft PJSC, which the U.S. and European Union have targeted with punitive measures, and is the biggest foreign investment in Russia since the crisis in Ukraine. It also marks a stunning return to deal-making for Glencore Chief Executive Officer Ivan Glasenberg a little more than a year after his company was forced to raise cash from shareholders.
Glencore said in a statement Wednesday it would commit 300 million euros in equity, with the rest coming from the Qatar Investment Authority — itself Glencore’s largest shareholder — and bank financing.
Glencore said the deal was still in “final-stage negotiations” and would likely close in mid-December. The QIA declined to comment. Putin, who announced the deal on television with Rosneft Chief Executive Officer Igor Sechin, put the total deal value at 10.5 billion euros. It wasn’t immediately clear why the figures differ.
Bringing in buyers for Rosneft, especially a trader like Glencore, probably makes “Putin smile all the way to when Santa Claus comes around in Moscow,” Steen Jakobsen, the chief investment officer of Saxo Bank A/S, said on Bloomberg Television on Thursday. Putin “was under pressure because the privatization program in Russia has been very stale and it has been almost impossible to find them a deal partner.”
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