Russia’s biggest retail bank Sberbank, has agreed to acquire home grown investment bank Troika Dialog for $1 billion.
Announcing the deal today, Sberbank head German Gref said terms of the deal will be finalised in the next few months.
Troika Dialog will operate as a standalone unit for three years once the transaction is completed, the deal term mandates.
“We are gaining the unique opportunity to offer modern financial services to tens of thousands of Russian companies that up until now lacked such possibilities”, announced Mr. Gref in a statement.
The state owned Sberbank will buyout the 63.6% stake held by Troika’s employee partners along with the remaining 36.4% held by Standard Bank of South Africa.
The Russian government plans to divest its stake further from the current 60% level in Sberbank. The market capitalisation stands at $75 billion while the balance sheet size is worth $260 billion.
“Acquiring an investment banking franchise should help Sberbank compete against [Russia's second-largest bank] VTB on the depth and diversity of product range offered to their principal corporate client base”, said analysts of Renaissance Capital in a note.
The transaction is expected to be over by the end of this year.