Mitsui offered to pay up to $ 174 million for a 10% stake in R-Pharma

Japanese corporation Mitsui & Co. is prepared to pay between 15 and 20 billion yen (approximately $130 to $174 million) for "roughly" a 10% stake in the Russian pharmaceutical company R-Pharm, reports the Japanese magazine Nikkei Asian Review.

Mitsui believes the deal will allow the Russian company to expand its drug portfolio and increase its export potential.

Russian President Vladimir Putin is currently on an official visit to Japan, which could provide a convenient opportunity to develop Russian-Japanese economic ties that were disrupted after Japan, following other countries, imposed economic sanctions against Russia in 2014. Now, Japanese Prime Minister Shinzo Abe is seeking ways to improve relations with Russia, including by proposing an economic cooperation plan, writes Nikkei Asian Review.

R-Pharm declined to comment on the situation to a Vademecum correspondent. Alexey Ordzhonikidze, Vice President for External Communications at R-Pharm, who is currently in Tokyo, also declined to comment.

Nikkei Asian Review first wrote about the possibility of Mitsui acquiring shares in R-Pharm in October 2016. At that time, according to the publication, the Japanese company offered to acquire up to 10% of R-Pharm for $96.3 million. However, in November, the owner of R-Pharm, Alexey Repik, denied reports of negotiations with the Japanese.

On December 15, Alexey Repik confirmed to TASS that negotiations with Mitsui were taking place. According to him, the discussion involves the sale of a stake ranging from 10% to 20%. The parties have not yet agreed on a price: in Repik's opinion, the amount offered by the Japanese side is insufficient.

According to a source at Vedomosti, other investors may also participate in the deal alongside Mitsui. If Mitsui is the sole buyer, it will be sold a 10% stake in R-Pharm; if a pool of investors is involved, the stake will be 20%, says the publication's source. Another interlocutor at Vedomosti said that the Russian Direct Investment Fund (RDIF) with its partners, which include the Japan Bank for International Cooperation (JBIC), could join the consortium.

Mitsui is a major Japanese trading and investment company founded in 1947. It operates in the energy, chemical, metallurgy, and consumer goods production sectors. It has 141 offices in 66 countries worldwide. Its workforce comprises over 47,000 employees. In the financial year ending March 31, 2016, Mitsui's revenue was $45.8 billion.

JSC R-Pharm is a Russian pharmaceutical company. The owner of 100% of the company's shares is Alexey Repik. Its main areas of activity are drug and biopharmaceutical production, research and development of new drugs and technologies, and supplying the Russian market with medicines from foreign manufacturers. R-Pharm was included in the Forbes ranking of the 200 largest private companies in Russia for 2015. The pharmaceutical company, whose revenue for 2015 increased by 6.5 billion rubles to reach 68.7 billion rubles, took 103rd place in the ranking.