Three of Top 10 Ukrainian M&A deals in 2011, stated by KyivPost newspaper were financed by foreign capital. These are: Ukrtelecom, Inkerman, VAB Bank.
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.
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.
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.