PHARMACEUTICALS JV WITH FRESENIUS KABI
Moscow, Russia – April 25, 2014 – Sistema JSFC ("Sistema" or the “Group”) (LSE: SSA), the largest publicly-traded diversified holding company in Russia and the CIS, today announces that it has signed binding agreements with a German pharmaceutical company Fresenius Kabi, which is a part of a global health care group Fresenius SE & Co KGaA, and Zenitco Finance Management (“Zenitco”), another shareholder1 of Binnopharm CJSC (“Binnopharm”), to establish a pharmaceuticals joint venture (“JV”) for operations in Russia and the CIS.
The JV will combine 100% of Binnopharm and 100% of Fresenius Kabi’s Russian and CIS business. In recognition of contributing its Russian business and a cash consideration, Fresenius Kabi will receive 51% in the newly formed company, while Sistema and Zenitco will own 37% and 12%, respectively, in the joint venture. The joint venture has an initial minimum term of 5 years, after which the parties may choose to extend or seek a liquidity event. The closing of the transaction is expected after the receipt of certain regulatory approvals, including from the Russian Federal Antimonopoly Service and the Government Commission on Monitoring Foreign Investments.
Fresenius Kabi is one of the global leaders in segments of clinical nutrition and IV drugs, and has sold products in Russia since 1994. The joint venture is designed to combine Fresenius Kabi’s portfolio of products and its extensive marketing expertise with Binnopharm’s local production and distribution facilities. The joint venture will utilize Binnopharm’s existing facilities to localize production of Fresenius Kabi’s infusion solutions and generic products, and allow Binnopharm to promote and launch new biotech products through Fresenius Kabi’s marketing force and sales network.
Mikhail Shamolin, President and CEO, commented:
“The pharmaceutical sector in Russia has exciting prospects and we are pleased to combine our operations with Fresenius Kabi in this joint venture. We see excellent opportunities for both companies to leverage each other’s strengths, such as Binnopharm’s local production facilities and the extensive portfolio of Fresenis Kabi’s products in order to develop a leading pharmaceutical business in Russia and the CIS.
This transaction underlines Sistema’s ability to partner with leading international businesses. We look forward to creating and realizing further shareholder value in the joint venture and assisting with its growth plans.”
For further information, please visit www.sistema.com or contact:
Tel.: +7 (495) 692 1100
Tel.: +7 (495) 730 17 05
Sistema is the largest publicly-traded diversified holding company in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the Company reported revenues of US$ 35.9 billion for the full year of 2013, and total assets of US$ 43.2 billion as at December 31, 2013. Sistema’s global depository receipts are listed under the symbol “SSA” on the London Stock Exchange. Sistema’s ordinary shares are listed under the symbol “AFKS” on the Moscow Exchange. Sistema was ranked number 308 in the 2013 edition of the Fortune Global 500 list. Website: www.sistema.com
The Company is not an investment company, and is not and will not be registered as such, under the U.S. Investment Company Act of 1940.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might” the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. In addition, there is no assurance that the new contracts entered into by our subsidiaries referenced above will be completed on the terms contained therein or at all. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.
1 Zenitco Finance Management and Sistema JSFC own 26% and 74% of Binnopharm, respectively.