MAZ and KamAZ merger postponed
Belarus believes that Belarusian automobile manufacturer MAZ and Russian KamAZ could merge into a single holding Rosbelavto on equal terms only. Russian enterprise’s capacity and capitalization is significantly higher, therefore chances of the deal closure on Belarusian terms are low.
“We have a firm agreement [with Russian President Vladimir Putin – Ed] that if we merge assets it will be 50/50 with the corresponding management. However their management [Head of Rostechnologia Sergey Chemezov – Ed] is unhappy with 50/50. They want a controlling stake and say Belarus is asking for too much. Well, good, if it is too expensive, then do not accept”, President of Belarus Alexander Lukashenko said during June 14 meeting with the President of Bashkortostan Rustem Khamitov. Simultaneously, Alexander Lukashenko emphasized that Belarus was not intending to compete with KamAZ.
“Why should the holding company, which will include a variety of companies with different market capitalization and other factors, be created on equal terms? The resent assessment of MAZ by Ernst & Young was USD 800 million and KamAZ – USD 3 billion”, Andrey Tretelnikov, an analyst with Rye, Man & Gor Securities commented on Lukashenko’s statement. He noted that MAZ’s future was dependent on the Russian market, and that the Russian authorities had wide opportunities to deny access for Belarusian manufacturer to the market: by introducing additional environmental requirements or amending utilization fees. At the same time it could be anticipated that if the deal is not closing now, in the future, if crisis occurs, the Russian government could theoretically offer assistance to Lukashenko in exchange for MAZ shares.
For reference. The JSC MAZ is among the five largest public companies in Belarus except for banks after Beltransgaz, Naftan, Mozyr Oil Refinery and Belaruskali. In 2011 the company’s sales revenues were USD 1.266 billion, net profit – USD 340.4 million. An average rate of Br 6075.94 per USD has been used for calculations (taking into account the shadow segment of the currency market and our own assessment). In 2011 the average number of employees was 22.227 workers.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.