Siemens investment in Russian company blocked

13th April 2005, Comments 0 comments

13 April 2005, MOSCOW - A more than USD 400 million (EUR 310 million) investment by German industrial giant Siemens in Russian engineering company Silovye Mashiny (Power Machines) was vetoed on Wednesday by federal authorities in Moscow for security reasons.

13 April 2005

MOSCOW - A more than USD 400 million (EUR 310 million) investment by German industrial giant Siemens in Russian engineering company Silovye Mashiny (Power Machines) was vetoed on Wednesday by federal authorities in Moscow for security reasons.

Scuppering months of preparations, the Anti-Monopoly Service barred the acquisition of the 73.46-percent stake, citing legislation preventing foreign companies from buying into strategic assets that serve the defence sector.

Silovye Mashiny mainly supplies the energy sector, but it also produces military components, including parts for the nuclear fleet.

Siemens had intended to buy the stock from the Russian industrial holding Interros for an estimated USD 215 million (EUR 167 million). It also planned to invest a further USD 200 million (EUR 155 million) in non-defence-related parts of the company.

Russian economic development and trade minister Gherman Gref had backed the deal but the country's security services reportedly voiced concerns about the foreign involvement. The Russian parliament also spoke against the sale.

The German company said in a statement on Wednesday that it regretted the collapse of the acquisition but would continue to expand its activities in Russia.

DPA

Subject: German news

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