Avtodom finalizing work on acquiring Mercedes-Benz's Russian assets

MOSCOW. April 19 (Interfax) - Avtodom is in the final stages of a deal to acquire the Russian assets of German automaker Mercedes-Benz, the Russian automobile dealer reported.

"The deal has not been completely closed and intensive work is underway with government bodies on finalizing and closing the deal. We will try to provide official comments by the end of the month," Avtodom told Interfax.

However, data from the Unified State Register of Legal Entities show that the dealer became the owner of part of the German company's Russian assets on Tuesday, specifically 100% of shares in the Mercedes-Benz Manufacturing Rus (MBMR) plant in Moscow Region and auto leasing, insurance and factoring firm Mercedes-Benz Capital Rus. These changes were entered into the register on April 18. Information about Avtodom acquiring control over Mercedes' other local assets has not been entered into the register so far.

Mercedes announced at the end of October that it was selling its stakes in local subsidiaries to Avtodom, including MBMR, Mercedes-Benz Capital Rus, as well as official distributor in Russia Mercedes-Benz Rus, leasing company Mercedes-Benz Financial Services Rus and Mercedes-Benz Bank Rus. Avtodom secured the Russian president's permission to acquire the bank in early February.

The price of the deal to sell the German company's Russian assets has not been disclosed. Avtodom said earlier that Mercedes will get an option to buy back the stakes in these companies "for a fair market price that is subject to determination by an independent appraiser."

"The main priorities when negotiating the terms of the transaction were to maximally ensure the fulfilment of obligations to customers from Russia, both in the area of after sale servicing and provision of financial services, and to preserve the jobs of the employees of the company's Russian divisions," Mercedes-Benz Rus CEO Natalya Koroleva said when the deal was announced.

Russia's Industry and Trade Ministry said then that after the sale is closed Avtodom might bring in other companies as manufacturing partners in order to set up joint production of automobiles at MBMR. Avtodom will also be able to carry out servicing of Mercedes-Benz automobiles sold on the Russian market, the ministry said.

Avtodom said at the time that would soon select a partner for operations at the plant, but it did not name possible candidates.

Moscow Region Governor Andrei Vorobyov said in early September that a Chinese partner was being selected to operate at the plant.

The MBMR plant at the Yesipovo industrial park in Moscow Region took two years to build and only opened in the spring of 2019. It has capacity to manufacture 25,000-30,000 vehicles per year. The plant's first model was an E class sedan. The company planned to gradually start producing GLE, GLC and GLS SUVs at the plant.

Avtodom Group, founded in 1992, has 27 dealerships in Moscow, St. Petersburg and Krasnodar. The company specializes in selling and service luxury cars and has 13 brands in its portfolio: BMW, BMW Motorrad, MINI, Lamborghini, Porsche, Audi, Mercedes Benz, smart, Volvo, Land Rover, Jaguar, Aurus, Ducati and KTM.

Avtodom has disclosed that its principal shareholders are Andrei Olkhovsky, who controls 50.1% through Bridge Capital LLC, and Andrei Koston with 46.8%.