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Russian companies look to buy up globally
Published: 11 June, 2009, 18:06
TAGS: Investment, Markets, Russia and the global economy, Economy
Gazprom says it’s received an offer to buy a stake in Slovenia's largest fuel retailer Petrol while the nation's economy minister refuses to sell it. Last month Russia’s Sberbank bought into Germany’s carmaker Opel.
Developed countries need money, developing countries have it. This is how analysts see Sberbank’s acquisition of a 35% stake in Germany’s flagging carmaker Opel.
But German Gref, the head of state lender Sberbank, says having enough money is not a sound reason for snapping up failing foreign assets.
“There is not much brain needed to buy something, the main thing is to manage it afterwards. To be honest, our management potential will not allow many deals to be successful. I don’t think we will see a lot of such acquisitions, unfortunately. “
Experts also agree on this and say buying into advanced western companies is the only way to modernize some of Russia’s outdated industries, as part of the government's strategy of diversifying away from natural resources.
With western expertise and modern assets, Russian industry should become more competitive in the global market. But not all foreign companies in trouble are ready to share their expertise in exchange for Russian money. Russian companies have tried to buy into, or buy outright, a number of global firms in recent years, but have often been rebuffed, sometimes on political grounds.
But that's likely to change in future. Yaroslav Lissovolik, Chief Economist at Deutsche Bank Russia, says the only way out of the economic downturn, for Russia and other countries, is a more open economy.
“Even if there is still protectionist inertia, it will have to be given up because of the simple reality of life. The developed world needs money which is in the developing world. If the world economy wants to survive, crisis countries will have to open to more investment and trade in goods and services.”
The government wants Russia to acquire foreign assets, and is setting up a special company headed by a former JP Morgan top manager to do so. The question is how much Russia will buy and that depends on whether other nations believe that these acquisitions are strictly business.
11.06.2009, 16:15
Investment essential for oil reserve turnaround as producer point to taxRussia won’t reduce oil production in the next three years acording to Deputy Prime Minister, Igor Sechin. But after 2012, output will depend on investment in exploration, which has dropped significantly. |
13.06.2009, 09:49
2 comments
Russia looks for joint entry to WTO with Belarus and KazakhstanA three-country block of Russia, Kazakhstan and Belarus will start the process of WTO accession next week in Geneva. The three CIS neighbours will form a customs area before seeking entry to the organization. |
Having russian companies investing globally is OK but what are the benefices for the average russian citizan ? To do this they must be quoted in New-York, Franckfort, London stocks market where speculations are the name of the game. As an example: Back in the 60s France had two great oils'companies: Elf and Total. Jointly, they developped the Sahara gisements and many others worldwide. At that time, they were nationalized, then owned by the french taxpayers. Supposantly to increase their influence in such a competitive World, their stocks were open to private interests. Consequently, now 80% of Total (Elf being included) belong to the american pensions' funds and the other 20% to the managing staff and western oligarchs. The french taxpayer has 0% plus the priviledge to pay one liter of gasoline 1,40 €. Same thing is happening to many other european companies. Globalisation work perfectly well for the few thousands creeps of this World, but rather badly for the little guy, where-ever he live. Copying the capitalistic system which recently showed to what extrems it can lead or beating it at its own game is not what I wish to be the best way to use for Russia and the other decent nations. Sincerely. Jean-Claude Meslin
@Meslin, a great comment! That is exactly how the governments and the elites in the so-called "liberal" capitalism have fleeced the taxplayer. And in many, many other creative ways! They are liberal indeed. With other people's money, other peoples assets, and by pushing wars, other people's children. I am cautiously optimistic that the developing countries, especially those that did not fall for the "development model" of the liberal persuasion, are not doing business the same way. If they did, they would not have the money now, would they? Well, they will say that France had to sell those shares, as it needed money to fill its budget holes. Fair enough. But why did France, and other developed countries had to resort to selling their assets to support basics of the society, when once, they were the creditors of the world? Because they were giving away the assets. You see, at first the assets were given away in support of inane ideology that "private sector and free markets know best", and once having lost the shirt on the gamble, they have to keep on selling, just to keep the budget afloat. One day, historians and economists are going to have a field day with the Hubris that underpinned it all. But now Nemesis stalks the land.