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Follow on Google News | Russia sells $11 billion stake in Rosneft to Glencore, QatarBy: Mergersindia In a surprise deal that comes despite US and European Union sanctions against Russia, the buyers will share a 19.5% stake in state-run Rosneft PJSC, which pumps almost 5 million barrels a day. The biggest foreign investment in Russia since the crisis in Ukraine, it also marks a stunning return to deal-making for Glencore chief executive officer Ivan Glasenberg little more than a year after his company was forced to raise cash from shareholders. Glencore said in a statement it would commit €300 million in equity, with the rest coming from the Qatar Investment Authority—itself Glencore's largest shareholder— "The deal became possible only thanks to your personal contribution," Putin touted the deal as one of the "largest acquisitions in the oil and gas sector in the world in 2016." "The negotiated price is in our view the maximum possible with the minimum discount of five percent to market prices," Sechin said. "One of the largest European banks" will provide financing, he added, without specifying which one. Russia is selling assets to raise money after the collapse in oil prices sapped government revenue. Putin had said in October that, in the absence of buyers willing to pay an acceptable price, Rosneft might buy back its own shares. Rosneft shares added 6.4% to 378.95 rubles as of 10:11 am Moscow time. "What can I say? It's super and very surprising," Mining footprint The deal marks the third big acquisition (https://mnacritique.mergersindia.com/ Glencore is a longtime investor in Russia, with a 25% stake in RussNeft PJSC, a mid-sized oil producer, as well as substantial agricultural holdings and a stake in aluminum giant United Co. Rusal. It also participated, along with Vitol SA, in a $10 billion prepayment deal with Rosneft for crude supplies in 2013. But in a sign of the political sensitivity of dealing with Rosneft, which is subject to western sanctions, Glencore said it would be "fully ring-fenced" "Glencore wasn't scared off by sanctions because this company has long worked in Russia and earns an awful lot here," said Konstantin Simonov, president of the National Energy Security Foundation, a Moscow think tank. "And the fact that a European bank gave the loan shows the Europeans are no longer scared" to lend despite sanctions, he added. On Qatar's part, the deal marks a rare venture of an Opec member into Russia, the world's second-largest oil producer. Moscow has joined forces with Opec, saying last week it will cut output by 300,000 barrels a day to add the 1.2 million barrels a day that the oil-producers group announced. Qatar played a key role in the Opec cut, acting as a go-between Saudi Arabia, Iran and Iraq and hosting meetings including oil ministers from Riyadh and Moscow. In his comments Wednesday, Putin noted that the deal was completed "amid the rising trend in oil prices," which helped boost Rosneft's value. Putin played a major role in that uptrend in recent weeks, helping negotiate the pioneering Opec deal. Continue reading here (https://mnacritique.mergersindia.com/ End
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