Polite armed men: why do tobacco billionaires need machine guns and anti-aircraft guns

Co-owners of "Megapolis" distributor Igor Kesaev and Sergey Katsiev sold their stake in the company for for $1.5 billion to transnational corporations. Why, after a record deal, they decided to invest in the arms business?
22.05.2014
Forbes
Origin source

In early June 2013 at a quiet patriarchal Carpet flew on a helicopter Steven Seagal, star of Hollywood action movies of the 1990s. In the carpet, he also shot: during an excursion on a weapons factory to them. VA Degtyarev Segal tried all the new machines and machine guns at a shooting range control and testing station, where the ranging arms. Complimented with a stranger, "Kalashnikov" - said the fires completely without impact. But he promised to promote and "Degtyarevskaya" products, "Rogozin and Lord Kesaev - my friends. What they want, I will do everything for them. "

Deputy Prime Minister and chairman of the military-industrial commission Dmitry Rogozin, also did not skimp on the promise - spoke about the plans to create a weapon of concern on the basis of the enterprise. Acting Vladimir Region Governor Svetlana Orlova, immediately pledged to provide favorable conditions for its development. Only one person abstained from big words and promises - accompanied the delegation lean man in a suit and a white shirt without a tie, the main owner of the plant. Degtyarev Igor Kesaat 29. He and his younger partner Sergey Katsiev 67 earned capital in the cigarette trade, creating a group of "Megapolis" company, which controls about 70% of this market in Russia. How did they get in the arms business, and why would they need it?

case Zoom

In late 2013 the Russian tobacco market took an unprecedented deal: international tobacco company Japan Tobacco Inc (JTI) and Philip Morris International (PMI) announced the purchase of 40% of the group of companies "Megapolis" for $ 1.5 billion - the whole company transaction was valued . to $ 3.75 billion Owner 66% Megapolis Holdings, the parent company "Megapolis", Igor Kesaev earned on this transaction, $ 990 million, his partner Sergey Katsiev (34%) - $ 510 million.

"Terrific. To create a structure for pennies and sold for such denzhischi! "- Affected the parameters of the deal, former tobacco wholesaler, who in his time was the victim of the expansion of the founders of the" Megapolis ".

The former tobacco trader remembers that first Igor Kesaev offered for redemption of the contract with the western tobacco company $ 10 million. Wholesalers amount is not arranged, then his company descended from the checks nalogos and law enforcement agencies. In addition, immediately complicated relationship with the manufacturer. "I was told in plain text, that all they have already agreed, so could only take the money and go away" - Tabachnik says, adding that before the conflict with Kesaevoy Katsiev was not in the early 1990s, relations were with them "almost friendly."

Kesaev trading business engaged as soon as the free market. In 1991, he created the company "Mercury", which was engaged in the supply of consumer goods from Hong Kong, Taiwan and China. Soon the range replenished cigarettes German tobacco company Reemstma and American Philip Morris - sales boomed, cigarettes swept away on the shelves. In 1992 he became a wholesaler Kesaev also a banker - through one of its agencies entered the founders Moseksimbanka.

But in 1993-1994, the decrees of President Boris Yeltsin, customs exemptions on the import of Russian cigarettes and alcohol got the National Sports Foundation, the Council of Veterans of Afghan war veterans, the Fund for the disabled and the blind and the Department of External Relations of the Moscow Patriarchate. import tabacus in Russia became possible only through them. Working with partners, friends say Kesaeva, he did not want and left for Switzerland.

In Lausanne housed the European headquarters of Philip Morris International. Kesaev with its excellent English - he graduated from the Moscow State Institute - and of experience in the tobacco market has managed to find a common language with its leadership. Three years later, when the benefits of the NSF and the church was canceled, he returned to Russia - since the PMI contract.

Big tobacco

The partners in the tobacco business Kesaev invited his former teacher from MGIMO Sergei Katsiev that since 1991 trade mission to the Netherlands missed. In 1993, he led the wholesale structure "Mercury", and five years later - specifically designed to work with products from other manufacturers of tobacco company "Megapolis".

Kesaev in this tandem is a strategist, Katsiev - practitioner.

Distribution of tobacco became a serious business when foreign manufacturers, before importing the cigarettes and give them the realization of dozens of wholesalers, began buying Russian factories. Mr Philip Morrisbeginning of producing cigarettes in the Leningrad region and the Krasnodar Territory, the BAT gained power in Saratov, Moscow and St. Petersburg, JTI - in St. Petersburg and Lipetsk region. Thanks to foreign investment production exceeded demand: in 2000 - 56% (according to "Grandtabak 'Association). Manufacturers started marketing reorganization. Now they were interested in partners who could take the product from the factory gates, deliver it by region, put on the shelf, to verify compliance with the Privacy Policy. Different areas of the country were fixed for different companies, the contracts shall be calculated in tens of millions, and wanted to get them all the wholesalers.

Officers "Mercury" then moved to Moscow and regions, accompanied by jeeps with guards armed with machine guns in the head of the mission "Mercury" went on exclusively chartered jet. On arrival he was always met pre-fitting of Moscow's personal car. "In fact, there were no serious threats, this was more of reinsurance and the usual show-off," - says one of the former tobacco wholesalers. "The ODAdivided by the period of time the competition was very tough - I do not agree with him another wholesaler. - There was a time when it was not possible to agree, nobody knew that it will take a competitor who is on your mind. "

By 2000, Philip Morris was selling all its products through three companies (including "Mercury"), Reemtsma and Gallaher sold only through the "Megapolis", BAT have been five kontrakterov. JTI sells its products through hundreds of Russian companies. Manufacturers were themselves interested in the consolidation of the market. In 2007, after the acquisition of Gallaher JTI company has evaluated both distribution models. "We are convinced that the involvement of a single reliable operator of the national level for the distribution of brands of JTI and Gallaher combined portfolio will provide us with great benefits," - says a representative of JTI Anatoly Vereshchagin.

As tobacco companies choose partners? "Monitor the entire market, looked who worked with cigarettes, analyzed, tested, and selecting the best offer contracts - says a former employee of Philip Morris. - But in the final stage of all solved in Swedenytsarii, Kesaev he led negotiations there and excellent English claimed that he is the best. Competitors could not do this. "

Monopoly "Megapolis"

Enlisting the support of manufacturers, Kesaev began buying up large. The first looked at the contracts Philip Morris. "The manufacturer has fixed certain areas for different companies, and then there was a price the business - says the former owner of the wholesale company and sell it Kesaeva Katsiev one of the first and switched to selling cars. - We thought market risks and decided to sell. The price we arranged everything happened in good faith. "

"The position they had a very honest, - adds another wholesaler. - Come and say that you will buy the business for $ 50 million, for example, and you can buy and own us, if you have that kind of money. "

In 2007 the company "Optima" with an annual turnover of $ 1.1 billion was bought by competitors and analysts for $ 200 million. "Megapolis", whose annual revenue was $ 2.5 billion if not generous. "If you needed money, the manufacturer secuChiva them. There was direct financing and indirect - Yield is managed by the manufacturer. Bonuses payment - ways to invest in a lot of distributors, "- says one of the friends of Igor Kesaeva.

And buy up large distributors with tobacco manufacturers contracts and regional wholesalers. If the regional wholesaler refused absorption near opened a branch or trading house "Megapolis", which brings down the price of cigarettes. The owner of the company "Yunekt" Dmitry Suhobrusov, sold his tobacco contract "Megapolis" in 2007, he says that the consolidation helps improve handling sales, because many smaller retailers do not want to invest big money in the development of sales system ( "tell him to do, and he does not move "). Suhobrusov was willing to invest, but after weighing all the pros and cons, accepted the offer "Megapolis" for the sale of the tobacco business. Now he is engaged in wholesale deliveries of food. Former owners of the "Optima" build shopping centers.

A market in Russia is now more than nand 70% belongs to Igor and Sergei Kesaeva Katsiev who joined the tobacco business "Mercury" in 2006 and "Megapolis". The rest of the market is controlled by the company SNA, British American Tobacco Exclusive Distributor (BAT), which is said to have failed to agree familiar with the situation on the market people, the leaders of "Mercury".

The "Megapolis", which today is part of the "Mercury" companies that own distribution centers, 250 branches across the country and 40 in Ukraine, the company works directly with 200,000 outlets.

In autumn 2011, the company was going to hold IPO, but delayed due to the changed conditions. Even with a small margin of tobacco distributor in 1-3% of the multi-billion dollar turnover brings a steady income. The owners of "Mercury" have long put it, not only in tobacco.

Retail, oil and brandy

In November 2006, Oleg Leonov 166, founder of the retail network "Dixie", owned nearly 400 stores of different formats, called the friend from an investment bank: said that there are good people who wondertsya his business. Chief among the "serious people" was Igor Kesaev with which Leonov was not acquainted. "Its expansion logic was obvious: people had a wholesale business, and they wanted to get closer to the consumer, we, too, came from the wholesale," - Leonov said.

After the first meeting with Kesaev they spent a week to determine the conditions, even took a couple of weeks to work lawyers, and 2 December 2007 it was announced that a group of "Mercury" Igor and Sergei Kesaeva Katsiev buys 50.9% "Dixy Group". The market capitalization of "Dixie" at the time exceeded $ 850 million, the cost Leonova package -. $ 473 million What really got Leonov for his package, he says, but analysts called the number $ 600 million "singles were not money, but the speed -. He says - we are talking with different people, but to speak one thing and do -. totally different "

Leonov did not bother past buyers who came to the tobacco market, which has always been very closed and even dangerous.

"In such cases, there are two criteria - Leonov says. - First, smackingDo people sedimentary. Kesaev decent. The second is whether they can evaluate the experience and achievements of those who work in the company. They were able to. "

However, with the new investment not always gone so smoothly. So, in late 2005, Shalva Chigirinsky Kesaeva announced the sale of $ 620 million for the 23.5% stake in Sibir Energy. Chigirinsky while fought for Moscow Refinery with "Gazprom oil" and hoped that Kesaev help him in this fight. But events took a different way: the Moscow government exchanged a controlling package in the refinery 18% Sibir Energy, and Chigirinsky and Kesaeva share dropped to 46.7%. In April 2009, "Gazprom Neft" began buying shares of the company Sibir Energy, in June - bought Igor Kesaeva package for $ 713 million in May 2010, he Chigirinsky ceded its stake in Sibir Energy «Gazprom oil" for the debt ($ 350 million)..

History of the Moscow Wine and Cognac Plant "Kin", the third volume of cognac producer in Russia, for which the owners of "Mercury" drew attention in 2007, developed by the logic of their tobacco expansion. In 2007, the plant and its main owner, Armen Yeganyan had serious problems. As Dr.Yeganyan was telling the lawyer Vladimir Sivak, in May 2007, the tax inspection Moscow counted plant previously accrued taxes and increased their amount 20 times (the end of 2008 claims were found to be illegal), and in July Yeganyan and the general director of "KiN" Nikolai Evseev accused kidnapping (in a few months, the case was dismissed).

In July 2008, Yeganyan has agreed to sell Kesaeva 7.93% stake in the plant. Kesaev Eganyan had to pay about $ 13 million, but the shares have not got. As not received and 43% of the shares "KiN", owned by the Government of Moscow - the capital decided not to sell them. In the same year Yeganyan charged with fraud: former shareholder "Usovskie wine and cognac cellars" (OOSA) Mikhail Maksimov said that Yeganyan illegally deprived him of 80% OOSA. In June 2012, Moscow's Basmanny court sentenced Yeganyan to six years' imprisonment and a fine of 1 million rubles, and the High Court of British Virgin Islands has satisfied the claim of structures Igor Kesaeva to recover from Eganyan owned company $ 13 million.

If the story of the Wine and Cognac Plant veryHoja failed attempt to "squeeze" the company, in the arms business co-owners of "Mercury" came, on the contrary, as a kind of "saviors" from other predators.

Help "Monolith"

In 2002, the provincial Kovrov turned around the war for the main enterprise of the city - the Degtyarev Plant (ZiD). The main products of the plant - small arms, anti-tank and anti-aircraft Missiles - in this war did not apply, but the battle was fierce.

After the privatization of the company was under the control of management of the plant, which by 2001, bringing its stake to 52%. But once the factory near the entrance there was a bus in which people visiting the plant launched a buying shares from employees. The usual scheme of the 1990s used the major specialists in the capture of companies at the time - MDM Group, which is the end of 2001 was able to buy about 43% of Zidane. In 2002, the new shareholders have tried to change the company's management - in response they have organized rallies of workers and local officials said about trying to raider attacks the defense enterprisement.

MDM such charges had never troubled - at that time the band was at the peak of its power. "To somehow resolve the situation, the general director Alexander Tmenov Zidane turned for help to their fellow countrymen from Vladikavkaz. Since the plant appeared Igor Kesaev ", - says Irina Tabatskova, in 2005-2010 he held the post of Mayor of Kovrov.

And in 2005 at Zidane completely changed owners 43% stake in MDM bought "Rosoboronexport", immediately transferred to their entering into "Rosatom" "TENEX" - among other things, ZiD produces equipment for the nuclear industry. A package plant managers acquired a group of "Mercury". Release of products for "Rosatom" Zidane later transferred to the neighboring Kovrov Mechanical Plant (KMZ), as a result of exchange "TENEX" has received 75% of CMH and "Mercury" - 100% Plant Degtyarev, which left only the production of weapons.

The plant at the time was unprofitable, for example, in 2006 ZiD finished with a loss of 120 million rubles. Despite this, in the same year, the company's board of directors approved the Inittive its CEO, has decided to send 180 million rubles for assistance to national non-profit foundation "Monolith", the president and co-founder of which was Igor Kesaev.

The Foundation was created in 2003 "to support economic, medical, social and cultural needs of needy employees of the Russian Federal Security Service, retired, and their families." After receiving charitable assistance Zidane, autumn 2006 "Monolith" fund of 185 million rubles, bought at auction the Russian Federal Property Fund Sochi sanatorium them. MV Frunze.

High class professionals

On the connections co-owners of "Mercury" with current and former members of the security services say for a long time. "They are in their business did not participate, but controlled," - says an old friend and Kesaeva Katsiev.

The most common among tobacco kings patrons called Vladimir Anisimov, in 2004-2005 worked as deputy head of the FSB of Russia, and after his discharge from the service became an adviser Igor Kesaeva in "Mercury".

Now he holds the position of nervogo Vice President NIR "Mercury" for security.

Advisor Igor Kesaeva on interaction with the media, Anatoly Shiryaev in a conversation with "Novaya Gazeta" did not deny that the "Mercury" has been working and many other former security officials: "They high-class professionals." The same Anisimov now part of the Board of Directors Factory Degtyarev.

Kesaev himself since buying Zidane now little interest. "He treated him like a second-rate asset", - said Irina Tabatskova. "I'll be honest, it never once saw - Zidane says former security officer. - In general, it is certainly strange that the plant, which produces products of special importance and classified as "top secret", comes the master-owner-driver. "

Russian Industry and Trade Minister Denis Manturov said that restrictions on private companies to own such companies do not have: "This case is a company owner, who has the prospects of expansion of public participation, or, on the contrary, the state attracts private biI carried for further involvement. " As an example of such cooperation is being created Manturov calls concern "Kalashnikov", 49% of which will belong to the co-owner of "Transmashholding" Andrey Bokarev 65 and the general director of "Aeroexpress" Alexey Krivoruchko.

Buying ZiD, Kesaev promised several times to increase the revenue and profit of the company and kept his word. In 2005, revenue from sales of the plant amounted to 4 billion (2 billion of which came from the sale of centrifuges to enrich uranium), that in 2012 only revenues from arms sales amounted to 12 billion rubles, and net profit exceeded 2 billion rubles. For comparison, a group of companies revenues "Megapolis" Sergey and Igor Kesaeva Katsiev in the same 2012 amounted to 381.8 billion rubles.

Fighting robots

In 2013, the Russian tobacco production fell by 6%: the tightening of legislation on the treatment of tobacco products and gaining momentum struggle with smokers do not promise anything good market operators. In the summer of 2014 cigarette packs hide behind windows, increasing amounts will recruit sales pinrafaktnoy and contraband cigarettes of Belarusian and Kazakh factories, which are unable to agree on common excise and tax rates in the framework of the Customs Union.

Against this background, all of a sudden JTI and Philip Morris International to buy 40% of "Megapolis", paid for a package of $ 750 million each. What for? "The transaction creates attractive returns and lays the foundation for further development of infrastructure and improvement of operational processes in such a strategic area for us as a distribution", - said the representative of Philip Morris Irina Zhukova. "Through this transaction, the Group JTI would strengthen the foundations of their business, and to strengthen the relationship with the distributor in the largest market JTI», - echoes Anatoly Vereshchagin from Japan Tobacco.

Translation from corporate human language: a falling market share is less better profits with a third party distributor.

Quite a different picture on the arms market. With the appointment in late 2011, Dmitry Rogozin, deputy prime minister and the new curator of the Military-industrial complex of Russia with the cooperation of the state of Russia's largestYi businesses in this area began to develop at an unprecedented pace. Already in August 2012, President Vladimir Putin said at a Security Council meeting that he wants to weaken the military's monopoly of the state, simplifying the creation of new defense industries with the participation of private companies.

Earlier privates entry into this industry was virtually closed: according to experts, is now the public sector develops about 90% of "military money". Which amounts involved? In the next 10 years, Russia intends to spend on re-program to 20 trillion rubles. In 2015, as expected, Russia's military budget of 3 trillion rubles (about 3.7% of GDP).

"I have with many of our largest oligarchs, as they are called, converse and so shoulder nudge guys, well, let me forward," - said Dmitry Rogozin Forbes.

Degtyarev factory prepared for the new realities. Large-scale reconstruction, purchased new equipment every year at least 25% of the profits spent on plant modernization, said in charge of the production of small arms Vice-President Sergey Hetagurov Zidane, the former presents tedatel North Ossetia, the Council of Ministers and the former head of the Federal Migration Service.

And in 2012, "Mercury" has sold 25% of the plant Degtyarev "Rostec", which should help the company to load orders. Why the state corporation package? "While I can not say anything, it happened", - the managing director responsible for strategy - Head of the Department "Rostec" Alexander Kashirin. But their big plans for Zidane during a visit to the Carpet has announced Dmitry Rogozin. According to him, at the base of the plant is planned to create a special weapon concern "Degtyarev" and no less the center of robot technology. In the carpet need to create one of the main areas for its development, said Deputy Prime Minister. "We need to keep fighting in a contactless manner. To our guys did not die, but for this it is necessary to use military robots ", - Rogozin explained to journalists in Kovrov.

Before mass production of military robots on siede not yet reached, but in the project "set soldier of the future" - equipment "Warrior", samples of which the general public to see "ezhlivyh people "in the Crimea, the Degtyarev plant struggles to participate. on the main decision-arms - machine, which will be part of a set of "Warrior", is still pending. Compete two samples: AK-12 concern "Kalashnikov" and AEK-971 Factory Degtyarev. The fate of the machine decides the advisory council of the Military-Industrial Commission, whose meeting was scheduled for May. In 2014, when "Warrior" delivery to the troops only just begun, the state defense order is planned to buy 50 000 sets.