At the ‘M&A Trends 2012’ conference, held on 31 May 2012 by newspaper The Moscow Times, participants gathered to discuss the latest events on the young Russian M&A market, to share experience and forecast the growth trajectory in the M&A sector over the coming years. The journal Competition and Law was the event’s information partner.

The event was opened by Sergey Puzyrevsky, the head of the legal division of the Russian Federal Antimonopoly Service, who set out the standards for state authorities to consent to transactions; the parameters and approaches for a decision to complete a transaction to be taken; and factors that affect control over foreign investments in strategic sectors in the Russian Federation.

Larisa Mitrinskaya, chair of the State Duma’s committee on ownership issues, discussed Russia’s accession to the WTO. She called for there to be open contact with the government, primarily to protect Russian business from the consequences of accession to the WTO.

The third speaker was the moderator of the first session, Troika Dialog strategist Ovanes Oganesyan, who shared concepts and ideas for M&A:

geographical diversification, increasing income and market share, hiring a team, and desire for growth.

The first session was rounded off by Anton Vashkevich, senior associate at Goltsblat BLP. In his speech, he listed all stages of a transaction, and the documentation accompanying them: negotiations – memorandum of understanding, due diligence – providing comments and information, the structure of the transaction and transaction documents, and the process of closing the transaction.

Dmitry Dedov, a Supreme State Commercial (‘Arbitration’) Court judge, opened the second session. He related his experience of judicial practice, and the nuances of a compulsory purchase of shares from minority shareholders. He then offered his opinion regarding the valuation of shares in a compulsory buy out, and on the policy of discounting: if there are several stances that could be taken when shares are valued, the court should tend towards the actual cost of the transaction.

The next speaker, Krzysztof Zielicki, vice president of M&A at TNK BP, devoted his speech to the problems of a joint venture. He focused on distinguishing contemporary trends from the romantic notion of a merger in the past and on the importance of an overall vision, the presence of strong leaders on both sides and the involvement of M&A experts and advisers in the deal process.

The speech of Dmitry Koronchik, head of private equity at Pepeliaev Group, dealt with the enforcement of foreign court decisions, and he also offered practical recommendations for structuring direct investment transactions in Russia. He spoke about the advantages of English law over Russian law for private equity investors: legal instruments, convenience for corporate transactions, the high level of effectiveness and transparency of the court system, and the ability to enter into a fully fledged shareholders’ agreement.

The closing presentation in the second session was from Alexander Ermolenko, partner and head of corporate at FBK Legal. He highlighted the main negative points in using Russian law in M&A transactions, the most topical legislative changes for M&A transactions, pros and cons, contentious issues and contradictions. He also spoke about the prospects for M&A lawyers and the courts of the new Russian Civil Code.

The third session opened with a speech by Evgeny Savitsky, head of the corporate division at OAO Megafon, in which he put forward arguments as to why Russian companies structure transactions under English law. He spoke about resolving the problems associated with the use of Russian law in a merger transaction. These problems have led to a model being created in which the problems have been resolved with the aid of a shareholders’ agreement. However, the speaker admitted that the team at OAO Megafon has not implemented this model.

The next speaker was Nikolay Leman, a partner at Financial Consulting Group. He dealt with the subject of exit strategies for regional food retail. He also spoke of how regional players tend to aim for integration, and about the networks for which integration is beneficial.

The final speaker Artyom Zakharov, M&A integration director at PepsiCo / Wimm-Bill-Dann,shared with the conference’s participants his knowledge of implementing a model for an M&A transaction within the scope of Russian law. He told those present about his experience of the acquisition of the regional company Opolie in a Russian law deal. He highlighted effective tools in the integration process: focusing on key employees, creating an integration committee, preserving the separate legal entity, looking at the integration from a long-term perspective. All of this allowed high growth figures to be posted against the backdrop of integration work taking place.