M&A transactions involving Russian targets reached $52.8 billion in 2013

Contributed by Nadim Najjar, Managing Director, Middle East, Africa, and Russia/CIS at Thomson Reuters

MOSCOW, Jan 16 (PRIME) -- Investment banking fees in Russia totaled U.S. $198.1 million during the fourth quarter of 2013, a 55% increase from the previous quarter. Announced M&A transactions involving Russian targets reached $16.9 billion during the fourth quarter of 2013, 25% less than the value seen during the previous quarter.

Equity capital markets issuance totaled $2.2 billion during the fourth quarter of 2013, taking the full year 2013 total to $9.0 billion, while total 2013 debt issuance reached $74.3 billion from 197 issues, a 4% decrease from 2012’s record annual total of $77.2 billion.

The investment banking fees earned throughout 2013 totaled $805.5 million and registered a 3% increase from 2012.

Fees generated from debt capital markets underwriting totaled $293.9 million and accounted for 36% of the 2013 Russian investment banking fee pool. Equity capital markets underwriting fees totaled $101.1 million, up 7% from 2012. Advisory work on completed M&A transactions generated $223.7 million during 2013, while syndicated lending fees increased 5% to $186.7 million. VTB Capital topped the Russian investment banking fee ranking during 2013 with $97.8 million, or a 12.1% share. JP Morgan and Sberbank CIB followed in second and third positions, respectively.

Russian target M&A throughout 2013 totaled $52.8 billion, less than half the value observed during 2012 and the lowest annual total since 2009. Russia was the 8th most targeted nation worldwide, down from 5th during 2012. 82% of Russia deals were domestic, involving a Russian acquirer, and 54% deals involved targets in the energy & power sector.

Russian outbound M&A activity totaled $2.8 billion during 2013, a 63% decline from 2012 and the slowest annual period for outbound M&A since 2004. Canada was the most popular target for Russian buyers, accounting for 47% of outbound M&A by value, due to a $1.3 billion offer for remaining shares in Canadian mining company Uranium One, from Russia’s state-owned ARMZ. VTB Capital topped the 2013 announced any Russian involvement M&A ranking with $13.7 billion, while Morgan Stanley took second place with $10.8 billion.

Equity capital markets issuance totaled $2.2 billion during the fourth quarter of 2013, taking the full year 2013 total to $9.0 billion. This marked an 8% increase in activity from 2012 and the highest annual total since 2007.

Eleven follow-ons totaling $6.6 billion accounted for 73% of ECM activity during 2013, while four initial public offerings totaled $1.8 billion. The largest Russian ECM transaction during 2013 was Bank VTB’s follow-on in May, which raised $3.3 billion. Bolstered by this deal, Financials was the most active sector in Russia during 2013.

Citi topped the 2013 Russian equity & equity-related ranking with 19% of the market. Goldman Sachs took second place.

Total 2013 issuance reached $74.3 billion from 197 issues, a 4% decrease from 2012’s record annual total of $77.2 billion. The Russian government’s $6.9 billion bond placing in September was the largest offering during 2013.

Russian ruble-denominated DCM activity decreased 6% from 2012 to total $32.1 billion during 2013. VTB Capital took the top spot in the 2013 Russian debt ranking with a 16.5% share. Gazprombank and Sberbank CIB followed in second and third positions.

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