OREANDA-NEWS. May 20, 2010. Russian Technologies is to acquire 12.1% in Kamaz on the assumption that the company’s total EV is USD 2.5 bn. The acquisition was approved by Russian Technologies’ supervisory board in late April.

The news should have a moderately positive impact on Kamaz equity prices. With total EV estimated at USD 2.5 bn, one share in Kamaz costs USD 3.53, which implies a 56% premium to the current market price. Given the company’s low free-float, we expect the shares to be bought out from one of the company’s existing shareholders. Finally, we note that the forthcoming deal should not make Russian Technologies controlling shareholder in Kamaz and, therefore, should not entail any buyout offer. The market, however, is expected to give a positive response to the news. We do not rule out that other market participants could use the price paid by Russian Technologies as a reference point in determining Kamaz’s fair market value.