(Platts) -- Russian conglomerate Sistema has signed a deal to acquire SG-Trans, the country's biggest independent operator of railcars for transportation of LPG, the company said Tuesday.
Sistema will pay a total cash consideration of Rb22.77 billion (USD730 million) for 100% of SG-Trans, in a deal which the company hopes to close by the end of this week, it said in a statement.
The Russian government previously approved a tender to select a buyer for SG-trans.
Sistema, which owns a majority share in Russia's eighth largest oil producer Bashneft, said that the acquisition is in line with the company's strategy to develop a strong position in the LPG transportation market.
"We believe Sistema is well positioned to benefit from this acquisition due to SG-Trans' leading position in the Russian LPG transportation market and our now combined fleet of 34,500 railcars," Sistema CEO Mikhail Shamolin said in the statement.
The acquisition of SG-Trans is "a significant value creation opportunity, through potential restructuring and optimisation efforts, adjustment to market rates and the exploration of possible strategic options for SG-Trans' gas storage and retail segment," the statement said.
Sistema and Bashneft are now looking at options to combine its rail investments under one management team, the company said.
Liquefied petroleum gas, also called LPG, GPL, LP Gas, liquid petroleum gas or simply propane or butane, is a flammable mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles.
MRC