Swedish financial giant Sber has won approval to take its largest equity stake in a northern city—and it’s not going to be the first. The investment, worth $1 billion, will go into the hands of a new management team with deep experience in Northern Europe and Scandinavian finance. The government awarded the consortium an initial license for 30 million kronor ($1.42 billion) in loans from 2021 to 2025. It already owns stakes in four regional airports and has been planning a fourth for some time.
What’s new about this deal?
This acquisition is likely to go down as one of the most significant in the history of the financial services industry. It will see the world’s leading financial services giant Sber acquiring a 50% stake in the northern city of Umea. The deal includes 4.2 billion kronor in equity, comprised of 9% cash and 5% debt. The assets will be managed through a joint venture between Sber and the regional airports authority. The deal is expected to close in 2021. The largest shareholder of the joint venture will be the government of Russia. Earlier this year, the government approved plans to expand the Vladivostok-Umea route processing capacity to handle the deal’s expected demand. The expansion will boost the joint venture’s capacity by up to 50% while creating up to 350 new jobs.
The 3.2-billion-kronor stake
The deal will see Sber acquire a 51.8% stake in the joint venture for 3.2 billion kronor. The details of the transaction remain unclear, as does the amount of debt refinanced under the agreement. It has been reported that Sber is looking to raise up to 40% more in financing than it needs to meet the debt ratio. That’s likely because it has a bad financial experience in Russia in the wake of the MH17 shooting and financial markets are downturned. The assets being acquired by Sber will include Umea’s large central business district, as well as the large manufacturing and small business areas. The deal is also expected to increase the company’s presence in Scandinavia, with the launch of several new products in the country.
The commitment from key players
The deal will go through a new odishadiscoms management team led by former Goldman Sachs CEO Jamie Dimon. The group also includes current and former heads of state, business leaders and businesspeople from several European and Asian countries. They will form the core of a new global investment team focused on boosting Sber’s long-term viability and growth. Other key players in the deal include Swedish industrial chemicals giant Apax, and Norwegian oil and gas giant Statoil.
Asset development
The assets being acquired by Sber will include a number of large and small commercial properties across Europe and Asia. The majority of them will be located in Northern Europe. These include manufacturing and construction sites, as well as industrial parks. The majority of the sites will have been abandoned for decades. The investment will also include modern, state-of-the-art staging facilities for major events, such as the Winter Olympics in Sochi.
Final conditions for approval
The government of Umea has granted permission for the deal to take place under the conditions set out in the approval process. The approval process will see the companies seeking to acquire the stake vegamovies submit plans to the authorities. They will then decide whether to grant the application. The plan will have to meet several stringent requirements, including ensuring minimum levels of debt-equity, income-to-tillage, and profitability are achieved. If all of these conditions are met, the application will be granted. If the company does not reach these levels of debt-equity and profitability, the government will require them to state why the transaction should not be approved.
Mergers and Acquisitions
The deal will go through a number of name changes before closing. It will first become known as the Umea-Sber joint venture, before being renamed Sber-Umea.
Norway—Sweden partnership
The deal will go through a Norwegian joint venture company, Umea-Sber, which will aim to handle the transaction. The business arm of the joint venture will be headed by former finance minister of Sweden, Eva Golinger. Some of the partners in the joint venture include Harry Stephenson, a former managing director of Goldman Sachs andchairman of The Walt Disney Company, and Ulla-Jorg Boe, a former managing director of S&D.
Key Takeaway
The acquisition of a stake in Umea-Sber will be the largest in the history of the financial services industry. It will add to the financial services world’s experience in a northern city. The deal also marks the beginning of a partnership with a leading global financial institution. The assets being acquired by Sber will include large construction sites in Europe and Asia, as well as large digitalnewshour manufacturing sites in Europe and Asia. The deal is expected to close in 2021. The acquisition of a stake in Umea-Sber will be the largest in the history of the financial services industry. It will add to the financial services world’s experience in a northern city. The deal also marks the beginning of a partnership with a leading global financial institution odishadiscoms. The assets being acquired by Sber will include large construction sites in Europe and Asia, as well as large manufacturing sites in Europe and Asia. The deal is expected to close in 2021.
