Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Antitrust Service Backs Bill Expanding Rights for M&A

The Federal Anti-Monopoly Service has submitted rule changes to the government that would allow banks outside the top 100 to purchase rivals with assets of up to 6 billion rubles ($182 million) without the watchdog's approval.

Under the new regulations, which were approved with the Central Bank, banks with assets of no more than 24 billion rubles, up from the current 14 billion rubles, will be able to buy smaller rivals without seeking anti-monopoly approval, the service's press office said.

The size limit for the acquisition targets was also increased to 6 billion rubles, from 4 billion rubles, it said.

The changes will take effect once they are added to the government's order regulating the mergers of financial organizations. The overall rules for approving deals will not change, however. The anti-monopoly service needs to be informed when buying control of 25 percent, 50 percent and 75 percent of a company's shares or one-third, half and two-thirds of a limited liability company.

The rapid growth of bank assets last year meant that the anti-monopoly service had to oversee too many deals, it said in a note included with the proposed changes. According to Central Bank figures, in the year to Jan. 1 Russian banks' assets rose 103.4 percent to 56.44 trillion rubles.

Anti-monopoly service approval takes 30 to 90 days, said Ilya Rachkov, a partner at NЪrr Stiefenhofer Lutz. The Central Bank will still need to approve deals, which takes three to six months, he said.

Many smaller banks do not have adequate capital, so making it easier for them to merge is a logical step, said Maxim Solntsev, chief executive of SDM-Bank (No. 121).