Sistema PJSFC’s RUB11.8 Billion Acquisition of a 46.5% Equity Stake in Sintez and a 75.1% Equity Stake in Biocom

Latham & Watkins advised Sistema in the transaction.

Sistema PJSFC (LSE: SSA, MOEX: AFKS), a publicly traded diversified Russian holding company, executed the acquisition, together with a financial partner, of a 46.5% equity stake in Sintez Kurganskoe Medical Products Company and a 75.1% equity stake in Biocom, through holding company Sinocom Investments Limited, from investment firm Marathon Group for a consideration of RUB11.8 billion.

The 46.5% stake in Sintez was acquired by Sinocom for RUB 8.2 billion in a transaction financed jointly by Sistema and a financial partner. Subsequently, in order to combine the businesses, newly acquired Sintez purchased a 75.1% stake in Biocom from Sinocom for RUB 3.6 billion. The purchase of Biocom shares was funded with Sintez’s own capital and funds borrowed by Sintez. The companies have complementary portfolios in terms of product types, have collaborated in the area of sales for many years, and are managed by a single executive team. The consolidation of the assets into Sintez will capture existing synergies and support the further growth of shareholder value.

Sinocom intends to make a public offer (mandatory tender) to minority shareholders of Sintez to acquire their ordinary registered shares in the company.

Sistema and its financial partner have concluded an agreement under which Sistema will acquire its financial partner’s stake in Sinocom within three years of the transaction closing.

Sintez and Biocom, together with Alium, a pharmaceutical company being created by Sistema through the merger of OBL Pharm and Binnopharm, will be a major market player, with the potential to become a top-three Russian pharmaceutical company in the commercial segment.

The combined product portfolio of Sintez, Biocom, and Alium will include more than 500 products, and its manufacturing capacity will consist of six production facilities in Moscow, the Moscow region, Kurgan, and Stavropol.

Sintez Kurganskoe Medical Products and Goods Company is one of Russia’s ten largest pharmaceutical companies by pharmaceutical product output. Sintez accounts for approximately 3% of the total Russian pharmaceutical market, and 23% of the market for antibiotics.

Biocom specialises in the production of non-patented antibiotics and medicines to treat cardiovascular and central nervous system diseases.

Latham & Watkins advised Sistema with a Moscow team led by corporate partner Olga Ponomarenko (Picture) with associates Timur Bayramov, Oksana Uberwolf, and Bairas Magadeev, and London associate Yana Nastyushenko.

Involved fees earner: Timur Bayramov – Latham & Watkins; Bairas Magadeev – Latham & Watkins; Yana Nastyushenko – Latham & Watkins; Olga Ponomarenko – Latham & Watkins; Oksana Uberwolf – Latham & Watkins;

Law Firms: Latham & Watkins;

Clients: Sistema PJSFC;

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