Power Machines stake unlikely to go to Siemens

MOSCOW (Reuters) - The chances of Germany's Siemens AG (SIEGn.DE: Quote, Profile, Research, Stock Buzz) securing a controlling stake in Russian turbine maker Power Machines (SILM.RTS: Quote, Profile, Research, Stock Buzz) are minimal, the head of Russia's cartel office told Reuters.

"We have received the Siemens bid. Their chances are minimal. They are buying their competitor," Igor Artemyev, head of the Federal Anti-Monopoly Service, told the Reuters Russia Investment Summit.

Siemens (SIEGn.DE: Quote, Profile, Research, Stock Buzz), which already owns 25 percent plus one share of Power Machines, has tried to take a controlling stake in the past but has been blocked by Russian authorities citing national security concerns.

Arkady Dvorkovich, the top Kremlin economic aide, told Reuters he was not convinced any one company should control Power Machines, and added that Russian firms seeking to build a stake will be given priority.

"I personally am not sure that it is absolutely necessary that such a company should have a shareholder with a controlling stake. I am far from sure that is right, though there are no particular restrictions on that," said Dvorkovich, head of the Presidential Experts' Department.

"Given that the major part of the company's sales market is in Russia and is linked to a significant degree with the atomic industry, probably priority will in the end be given to Russian companies. Though nothing is impossible," he told the Summit.

The Russian state does not hold a direct stake in Power Machines, but its competition regulator has the power to block a change in ownership.

The company has become an acquisition target for investors betting on booming demand for generating equipment at a time when demand for power is growing and Russia's electricity monopoly is being split into private companies.

Interros, which controls the world's top nickel miner Norilsk Nickel (GMKN.MM: Quote, Profile, Research, Stock Buzz), has a 30.4 stake in Power Machines, and power company RAO UES EESR.MM has 25 percent. Both Siemens and UES have a right of first refusal on the stake.

Industry sources say Alexei Mordashov, owner of Russian steelmaker Severstal (CHMF.MM: Quote, Profile, Research, Stock Buzz), and fellow Russian tycoon Oleg Deripaska, are vying to buy the Interros stake.

Interros last week said Siemens had said it wanted to exercise its right to buy the Interros stake, but Siemens said it was not currently interested in a majority stake.