CJSC 'MICEX' and OJSC RTS announced a framework agreement to combine the exchange groups which provides an order and procedures for establishing a joint exchange holding.
Signing the agreement represents a new stage in developing a Russian and international exchange infrastructure related to the future creation of the Russian national exchange leader which will be competitive with the largest global financial centers in terms of exchange and post-trading business scale, technical facilities, management experience, service standards and quality.
On behalf of MICEX the agreement was signed by Ruben Aganbegyan, the MICEX President, representatives of Sberbank, the Bank of Russia, UniCreditBank, Vnesheconombank and VTB. For RTS it was signed by Roman Goryunov, Chief Executive Officer of OJSC RTS, representatives of Renaissance Capital, Troika Dialog, Aton, Da Vinci Capital and Alfa Capital.
The deal is subject for approval by the Federal Antimonopoly Service and extraordinary general meetings of shareholders of MICEX and RTS scheduled for August 2011.
Key terms of the deal:
- RTS shares, including preferred shares, are valued at 34.5 billion rubles.
- MICEX shares are valued at 103.5 billion rubles.
- Assets used within the RTS business and kept in books of NP RTS are planned to be transferred to the books of OJSC RTS.
- The parties plan to complete corporate procedures related to the merger at the beginning of 2012.
- The IPO of the joint exchange is planned to take place in 2013.
VTB Capital and Credit Suisse acted as MICEX investment advisers. For RTS investment advisers were Morgan Stanley, Troika Dialog, Alfa-Bank, Renaissance Capital as well as Da Vinci Capital and Aton.
As a first step in the integration process a joint exchange management team has been formed. Ruben Aganbegyan, the MICEX President, will act as a CEO of the joint exchange. He will be responsible for the development strategy and building the exchange infrastructure required in order to establish the international financial center in Russiuussia. The CEO of RTS Stock Exchange Roman Goryunov will fill the position of the first deputy CEO of the joint exchange. He will be in charge of developing the markets of the joint exchange.
Substantial attention will be given to the integration process. Within its framework working groups consisting of employees of the uniting companies will be created. These groups will be engaged in developing the business configuration of the future trading venue in close cooperation with users. An over-arching Integration committee will be responsible for coordinating such activities. As a result of the completed integration process a vertically integrated exchange holding will be established which will provide a unique range of services on trading organization, clearing, settlement and depository services and technology with strong positions in Russia, Ukraine and Kazakhstan.
To ensure an open and clear public integration process a new website has been set up: www.exchange-integration.ru. This includes information on the membership of the working groups and users committees, the schedule of integration events, presentations and other information on the process.
According to Ruben Aganbegyan, the MICEX President, the agreement will launch the next stage in the process of establishing the joint exchange in the Russian market which will be a leading player for servicing trading in all main types of assets. "The main goal of the integration is creating a trading venue which is competitive on the global stage and which provides advantages to market participants and its shareholders as well as modernizing the Russian financial markets. The most positive consequence of the integration will be increasing liquidity levels on the Russian market, improving opportunities for expanding businesses and implementing state-of-the-art technologies for brokers and clients with new IT platforms in Russia, unifying the experience and expertise of the leading teams in Russian exchange trading. And, importantly, the integration of trading venues will also represent a key step towards creating a globally important international financial center", stressed Mr. Aganbegyan.
Roman Goryunov, CEO at OJSC RTS believes that the united exchange will have all prerequisites to become the core of the Russian financial market. "We have been presented with the serious task of making the Russian exchange infrastructure attractive, convenient and above all necessary for Russian and foreign market participants, investors and issuers. This is a great challenge for all of us. The current important issue is the creation of the team consisting of managers who will ensure the proper process of integration and establish an effective model for developing all markets and businesses of the united exchange. The crucial task is to maintain the dynamics of the Russian market for business development".