By Alexander Kolyandr
MOSCOW--OAO Rosneft's planned acquisition of Morgan Stanley's
oil-trading and storage business has collapsed after the companies
failed to win regulatory approval, amid tensions between the
governments of the U.S. and Russia.
Sanctions-hit Rosneft, Russia's largest oil company, and the
U.S. bank said the deal won't go ahead "due to an objective
impossibility to complete the deal that has arisen as a result of
regulatory clearances being refused."
"Having invested substantial efforts in the deal, the parties
regret that it could not be completed", the companies said in a
release Monday.
Morgan Stanley said it would now consider a variety of options
for the unit that take into account the interests of its
shareholders, clients and employees.
Morgan Stanley warned in October that the December 2013 deal
could fall apart as all necessary approvals needed to be received
by year-end.
"In the current environment there can be no assurance that the
transaction will close, especially in light of the existing
contractual requirement that all necessary approvals be received by
year-end," a Morgan Stanley spokesman said in a statement at the
time. Previously, Morgan Stanley had said it planned to close the
deal in the second half of the year.
Rosneft Russia's most indebted company, is subject to Western
sanctions and faces restrictions on acquiring certain technologies
and raising capital in the West.
In April, officials added Rosneft President Igor Sechin to a
sanctions list that restricts travel and freezes assets.
Write to Alexander Kolyandr at Alexander.Kolyandr@wsj.com
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