25 Apr 2023 11:17

Avtodom closes acquisition of Mercedes-Benz's Russian assets

MOSCOW. April 25 (Interfax) - Avtodom has closed the deal to acquire the Russian assets of German automaker Mercedes-Benz, the Russian automobile dealer reported.

The final stage of the deal to Mercedes-Benz AG's stakes in its Russian subsidiaries, including official distributor in Russia Mercedes-Benz Rus, the Mercedes-Benz Manufacturing Rus (MBMR) plant in Moscow Region, Mercedes-Benz Bank Rus, leasing company Mercedes-Benz Financial Services Rus and auto leasing, insurance and factoring firm Mercedes-Benz Capital Rus, has been completed, Avtodom said in a press release.

"We are pleased to announce the completion of the transaction to acquire the Russian assets of Mercedes-Benz. This was a long and difficult process of transferring foreign assets to a local investor. Now, with the deal closed, we are pleased to announce that servicing of Mercedes-Benz automobiles in Russia and the work of the other companies will resume shortly," Avtodom CEO Andrei Olkhovsky was quoted as saying by the group's press service.

"Everyone is currently concerned about what will happen with the plant. Soon we will be able to name our technology partner and share our plans to resume production. The most important factor for us is the preservation of employees' jobs," Olkhovsky said.

Options for bringing in a partner to restart the auto plant are being explored with Russia's Industry and Trade Ministry, Avtodom said. 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.

The price of the deal to sell the German company's Russian assets has not been disclosed. Avtodom said in late November 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."

Mercedes-Benz Rus said in a statement that, upon completion of the deal, the company will continue to provide warranty support and meet all obligations covered by valid service certificates, including post-warranty service packages for Mercedes-Benz automobiles officially sold through the distributor's retailers and Mercedes-Benz dealerships.

"Our company's main priority remains maintaining the loyalty of and high level of service for customers. We are currently considering various scenarios for doing business to sell automobiles on the Russian market. As for the plant at the Yesipovo industrial park, a technology partner will soon be selected for the further operation of production facilities. And it is still important to us to preserve employees' jobs to ensure efficient production in future," Mercedes-Benz Rus CEO Natalya Koroleva was quoted as saying by the company's press service.

The Mercedes subsidiary's central parts warehouse is resuming former operations and will soon resume deliveries to the brand's sales and service centers. The company's dealerships and service centers (Leningradsky Prospekt 39A and Veshki, 85th km of the Moscow Ring Road) are also resuming full operations.

The financial companies will provide the following services: leasing of cars, commercial vehicles and trucks for legal entities and individual entrepreneurs; credit services for retail customers for automobile purchases; factoring; automobile rental services; as well as insurance support. Servicing of previously signed contracts will be carried out on standard conditions.

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 Kostin with 46.8%.