Société Générale, the French bank, is to raise its stake in Russian rival Rosbank in a move, which will effectively give control of the group.
The company will pay $1.7 billion (£860 million) to increase its stake to 50% and one share from the 20% and one share that it bought for $634 million last year. It also said that it would spend $441 million buying out some minority shareholders. Société Générale expects to own 57.8% of Rosbank by June 2008 and becomes the latest European company to seek growth in emerging markets. Like other companies that have invested in new markets, Société Générale said that it would retain a close relationship with its local partner. The bank said that it expected Interros Holdings, the investment group of the Russian billionaire Vladimir Potanin, to remain „a significant minority shareholder of Rosbank in the medium term”.
Rosbank has more than 600 branches and is one of the biggest private banks in Russia, with three million individual customers, 60,000 small and medium-size companies and 7,000 large corporations. It posted a H1 net profit of 3.7 billion rubles (£75 million, $149.5 million).
Société Générale, the second-biggest French bank by market value, said that the Central Bank of Russia and the Federal Antimonopoly Service had approved the deal. Lafarge, the French building materials group, said this month that it would buy the Egyptian cement maker Orascom Cement for €8.8 billion (£6.4 billion). As part of the deal, Lafarge gave Orascom’s controlling family an 11.4% stake in the French company to tighten links. Renault, the carmaker, also moved to build its local relationships when it bought a $1.3 billion stake in Avtovaz, the Russian car group, saying that it would help to refurbish the company’s factory. (timesonline.co.uk)