There’s a deliberate international focus in the Deal this week. On the cover, Matt Miller, just back from Russia, explores the dealmaking complexities of that emerging, increasingly nationalistic energy giant. Russia controls some of the world’s largest reserves of oil and natural gas. And after a period in which its rapidly changing energy industry solicited foreign investment, the Putin government has both tightened the leash on the industry and has adopted a much tougher negotiating position with both customers and would-be investors. Russia’s dilemma, however, is profound: To fully exploit those reserves, it needs Western technology, expertise and capital. How it gets what it wants, while retaining control over oil and gas and their abundant profits willl be a story for years to come.
Our story on China, by Tara Croft, examines a different industry, pharmaceuticals, but from a similar perspective. China’s pharma industry is primitive, prone to copying and beset by structural problems. And yet, China’s vast population is a tremendous draw for Western pharma giants desperate for new markets for their beleagured product lines. Croft describes not only the interplay between Western pharma giants, their Chinese counterparts, but the Chinese government intent—like the Russians—to use the West to develop, but not to give away the pharmacy to, say, Pfizer. Her story has a wealth of insight and anecdote about the Chinese drug market, but obviously has larger dealmaking implications beyond that industry.
Also in the issue is our annual special report on charitable giving. This year we profile six finance figures who have plunged deeply into environmental philanthropy. They range from a Silicon Valley entrepreneur to several private equity investors to a handful of Wall Streeters. In the people category, readers should also check out our Movers & Shakers column where Dan Slater profiles nine newly minted M&A partners at top-drawer law firms. It’s fascinating. And in Transactions, I take another whack at thinking about the implications of this widening split between public and private companies.—Robert Teitelman
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