By Mauro Orru


Raiffeisen Bank International said a deal to buy a stake in Austrian construction company Strabag from a Russian industrial tycoon complies with Western sanctions, after Reuters reported that the U.S. is pushing the lender to abandon the transaction.

The Austrian bank said Wednesday that it had briefed all relevant authorities, including the U.S. Treasury and the Office of Foreign Assets Control, on the details of the transaction.

Raiffeisen Bank announced a deal in December to buy a 27.78% stake in Strabag for 1.51 billion euros ($1.64 billion) in cash from Russia-based Rasperia Trading, controlled by Oleg Deripaska. In 2022, the U.S. Justice Department charged Deripaska and three of his associates with sanctions evasion and other crimes.

"It was acknowledged that there is no U.S. nexus to this transaction. It goes without saying that RBI will not proceed with any deal which would be in breach of sanctions, or expose RBI to the risk of sanctions," the bank said in a statement.

Reuters had reported that Washington is pressing Raiffeisen Bank to drop plans to buy the stake, citing unnamed sources, saying that U.S. intervention is likely to derail the deal.

The bank said in December that it would buy the stake from Rasperia Trading through its Russian subsidiary AO Raiffeisenbank as a first step, and then transfer it to the wider group by issuing a dividend in kind. Raiffeisen said it expected the stake acquisition and the distribution of the dividend in kind to close in the first quarter of 2024, though it cautioned that a deal would require approval from Russian authorities.

Unlike countless Western companies, Raiffeisen opted to maintain operations in Russia after the invasion of Ukraine. The lender entered the Russian market in 1996 and didn't shrink its business after the annexation of Crimea in 2014. It has long been one of the European banks with the largest exposure to Russia.

The bank counted 9,942 employees in Russia at the end of 2023, according to its annual report, 405 more than in 2022. Russia contributed EUR1.34 billion to Raiffeisen's profit last year. However, the lender said it had continued to work on a spinoff or sale of AO Raiffeisenbank throughout 2023, adding that both options require approvals from Russian and European authorities.

After the war broke out in February 2022, Raiffeisen said its loan business had been scaled back significantly, with loan volumes down 43% per cent. The decline, mainly driven by the depreciation of the Russian ruble, mostly affected unsecured loans, mortgage loans to households, working capital finance and fixed-term loans to non-financial corporations, Raiffeisen said.


Write to Mauro Orru at mauro.orru@wsj.com


(END) Dow Jones Newswires

03-20-24 1210ET