$55bn TNK buy-up makes Viktor Vekselberg Russia's richest man

Oct 23, 2012

And BP shareholders look set to gain too, as Rosneft takeover includes $12.3bn cash payment

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THE Russian oil giant Rosneft doubled its bet on BP's Russian Business yesterday, agreeing to pay a  a total $55bn for both BP's and AAR's halves of the TNK-BP oil consortium. The deal makes Rosneft the largest public traded oil company and tightens the Kremlin's grip on Russia's energy

It also makes Viktor Vekselberg, the biggest shareholder in TNK, the richest man in Russia today, according to the Bloomberg Billionaires Index. The deal pays him $1.5 billion, boosting his personal fortune to $18 billion.

BP will take nearly 20 per cent of Rosneft and, says the Financial Times, potentially gain access to some of the world's largest untapped oil and gas  resources. In a statement, Igor Sechin, Rosneft chief executive, said the Russian firm would "benefit from BP's experience and its record of implementing best international practices in Russia".

BP chairman Carl-Henric Svanberg said yesterday's deal would "deliver both cash and long-term value for BP and its shareholders" and provide BP with "a sustainable stake in Russia's energy future".

The Daily Telegraph says that contrary to earlier fears about Russian state control shareholders are the winners in the deal. The paper believes the British oil giant will receive $12.3 billion net in cash and that could provide for a special dividend of as much as $10 billion. David Peattie, BP's head of Russia, said it will look at several options. "The board has made no decision on the return of cash to shareholders following this transaction," said spokesman for BP. "Those decisions will be made once the deal is completed early next year."

Bloomberg reports the deal has established 55-year-old Viktor Vekselberg, who invested in TNK through his Moscow-based Renova Group, as Russia's wealthiest man. "This is a super deal which is the logical outcome of TNK's 15-year history," said a spokesman for the billionaire, who will focus on technology investments in the future. The other oligarchs involved, including Mikhail Fridman, German Khan, Alexey Kuzmichev and Len Blavatnik - will also share in the deal.

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