Government blocks Sanoma from selling Cosmopolitan and Esquire publisher

The government commission on foreign investment did not approve the deal between the Finnish media company Sanoma and the owners of the publishing house Hearst Shkulev Media, Vedomosti writes .

Deputy Head of the Federal Antimonopoly Service (FAS) Andrey Tsyganov informed journalists about this, but he did not name the reasons for this decision. Tsyganov confirmed that the draft decision of the commission prepared by the FAS contained similar content.

One of the commission members also relayed information to Vedomosti that the commission did not approve the deal.

Thus, the commission did not approve the sale of part of the Sanoma Independent Media publishing house "Fashion Press", which publishes Cosmopolitan, Esquire, Harper's Bazaar, Robb Report, Popular Mechanics and Domashny Ochag.

Viktor Shkulev did not comment on the government commission's decision. Representatives of Hearst and Sanoma did not respond to the newspaper's inquiries.

According to Vedomosti, Hearst Shkulev Media is ready to change the terms of the deal. As reported in April by sources close to the buyers and sellers, Hearst and Shkulev proposed restructuring the deal so that it would not fall under legislative restrictions. In particular, the newspaper writes, the issue concerns the purchase of Fashion Press by Shkulev alone, who has Russian citizenship, and at a price half that previously agreed upon.

The newspaper's sources claim that the parties initially agreed to sell Fashion Press for 46 million euros.

In March, the Ministry of Communications issued a negative review of the deal between Sanoma and Hearst Shkulev Media. A Kommersant source explained that this was due to the presence of foreigners among the buyers.

The deal to sell Fashion Press was officially announced in January 2015. The parties to the deal filed an application to the antimonopoly service to approve the deal. A government commission is involved in reviewing the deal, since its decision has become necessary to approve deals with foreign investors since December last year.

Let us recall that in 2016 a law will come into force prohibiting foreigners from having more than a 20% stake in Russian media.