Thursday, 27 March 2008

Russia boost for Dresdner

Financial News

Jason Corcoran in Moscow
26 Mar 2008

Dresdner Kleinwort landed a hat-trick of advisory mandates in Russia last week, including a role as counsel on the largest ever deal in the country’s consumer sector, as the German investment bank bids to re-establish its position in Russia's capital markets after sliding down the league tables last year.

The German bank has been hired as an adviser, alongside domestic bank Renaissance Capital, by US soft drinks giant PepsiCo and Pepsi Bottling Group on its $1.4bn (€891m) acquisition of Russia’s leading juice maker Lebedyansky. The deal is the biggest in Russia’s booming consumer sector to date.

The deal allows PepsiCo to leapfrog rival Coca Cola in Russia's juice market. Coca Cola paid $500m for number two player Multon in 2005.

A banker close to the PepsiCo deal said: "The turbulence in the credit markets over the past six months has meant that the balance of power in competitive auctions has shifted from financial sponsors back to strategic players such as PepsiCo in this instance."

Dresdner also had a role on the $180m sale of an 85% share in the Parliament vodka brand by Copecresto Enterprises to Polish spirit maker Central European Distribution Corp. Renaissance Capital advised Parliament alongside Dresdner.

A banking source indicted there was significant interest from international spirit companies Bacardi and Diageo in the Parliament sale.

Its position as adviser on these deals completed a hat-trick of mandates for Dresdner last week after it acted as joint financial adviser, together with Alfa Bank, on the sale of a 33.47% stake in the electricity utility TGK-2 for $392.9m to Kores Invest company, a joint venture created by RWE and Sintez Group.

The German bank is recruiting an additional 60 bankers to cover Russia in an attempt to regain its position as one of the pre-eminent banks in the region after faltering in the past year.

Dresdner dropped out of the top 22 banks in data provider Thomson Financial's equity capital markets tables last year. It had topped the poll in 2006 thanks to its joint-bookrunner mandates on the Rosneft and TMK initial public offerings.

In mergers and acquisitions tables, Dresdner was ranked 18th last year, compared with its ninth position in 2006.

Senior representatives from the bank are currently working on a potential $85bn metals merger between Norilsk Nickel and Metalloinvest.

The tie-up has been devised in a bid to block a rival takeover attempt by aluminium giant Rusal, which is majority-owned by oligarch Oleg Deripaska.

Rusal has appointed six investment banks, led by Merrill Lynch and Credit Suisse, in its bid to buy a blocking stake and take control in nickel producer Norilsk.

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