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Deals

Russian tycoon eyes oil and telecom acquisitions

LONDON (Reuters) - Russian billionaire Vladimir Yevtushenkov plans to expand his oil-to-telecoms empire by acquiring energy assets over the next year to cement its role on the Russian oil market.

Yevtushenkov, controlling shareholder in industrial holding Sistema, told Reuters in an interview that talks with potential acquisition targets were already under way.

“We are definitely planning new acquisitions,” Yevtushenkov, ranked Russia’s 13th richest man by Forbes magazine, said during a visit to London on Tuesday.

“So this year and most likely in the first half of next year we will focus on restructuring, optimization, acquiring new assets. The plan is to create an (oil) company that would have a combined (annual production) capacity of 30-35 million tonnes.”

At that level, Sistema would produce around a third of top Russian oil company’s Rosneft’s annual output. Its two biggest production assets, Bashneft and Russneft, in which it plans to acquire a 49 percent stake, produced a combined total of 24 million tonnes last year.

Before the global economic crisis, Sistema’s key ambition lay in its consumer businesses but it has since moved to expand in oil -- a business it treated as non-core for many years, to hedge against weakening consumer purchasing power.

Its main asset, worth $17 billion on the stock market, is still Russia’s top mobile operator, MTS, but its business also spans banking, retail, tourism, healthcare and high tech.

Yevtushenko’s fortune rose to $7.5 billion in 2010 from $1.2 billion last year, according to Forbes.

The company last year paid $2.5 billion for control of Bashneft and five other Russian energy firms in which it already owned blocking stakes of up to 30 percent.

The strategy is part of its push to entrench its position on the Russian energy market. Sistema’s fourth-quarter revenue jumped 65 percent largely due to the contribution of the oil assets acquired last year.

Yevtushenkov would not say which oil companies he saw as acquisition targets but made clear Sistema was talking to several potentials. “The size of investment depends on how profitable the company is,” Yevtushenkov said. “We are holding talks. ... We are talking about buying companies.”

He said the company also sought acquisitions in the telecoms sector, predicting further consolidation on the Russian market.

“As part of this strategy we are holding consultations, talks, assessment of various companies ... “(but) I cannot say that we are approaching the final stage and that we will be able to announce a deal to the market as soon as tomorrow.”

In Russia’s fast-growing travel market, Sistema, has been in talks with British based tour operator Thomas Cook on selling a stake in Intourist, the Sistema-controlled remade version of the Soviet-era travel agency.

Yevtushenkov said he would stop negotiations in July if the sides failed to come to agreement on the price by then. It was unclear how big a stake Thomas Cook wanted to buy.

Editing by Dan Lalor

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