Gazprom, Sibneft stock quotations drop after deal announcement

MOSCOW, Sept. 28 Stock quotations of Russia’s natural gas monopoly Gazprom and Sibneft oil company that have been the leaders of growth on the Russian market in previous days have begun to decline after the announcement about a deal concluded by the companies.

On Wednesday, Gazprom and Millhouse Capital signed binding documents on the purchase of 72.663 percent of stock of Sibneft. The value of the deal is 13.091 billion U.S. dollars.

Right after this announcement appeared the companies' stock began to decline. So, Sibneft stock quotations dropped by five percent to the level of 3.70/3.80 dollars a share and Gazprom shares by 15:45, Moscow time, went down by one percent as against Wednesday's maximum to the level of 150.6-150.8 roubles a share, Prime-Tass reports.

Thus an old traders' tip "Buy on rumors, sell on facts" has again proved to be right. It was Gazprom and Sibneft shares that were the growth leaders on the Russian stock market earlier and the deal between them turned out to be foreseen in the stock quotation levels.

The purchase of Sibneft by Gazprom will not seriously affect the market, President of the Russian Union of Oil and Gas Industrialists Gennady Shmal told Itar-Tass on Wednesday. In his view, "this deal will allow the Russian natural gas monopoly to get closer to international oil giants."

Shmal believes "the strengthening of Gazprom is needed not only by the company itself, but also by the state as a whole which in essence will be controlling another oil company."

However, in the view of Shmal, "It is necessary to strengthen the participation and influence of the state in the country's oil and gas sector."

The president of the industrial union pointed out "this deal will help Gazprom to diversify its activity and increase capitalisation." Shmal stressed, "Such mergers is a natural process which is characteristic of all oil and gas companies on the world market.", Itar-Tass reported.