Ronald Lauder, a scion of the Estée Lauder cosmetics empire, is to forge a $2bn venture with the Moscow city government to manage and revamp the capital’s hotel business in time for Russia’s hosting of the Winter Olympics in 2014.
The deal, expected to be announced on Wednesday, will see Mr Lauder’s recently created Russia Real Estate Fund take a 51 per cent stake in the venture to manage the city government’s stakes in dozens of hotels across the city, including the Rossiya and Moskva hotels on Red Square, in return for investing 31.7bn roubles ($1.1bn) into the company. The Moscow city government is to take a 49 per cent stake.
As Russia and the US aim to “reset” political ties after years of chilly relations, Mr Lauder said he hoped the deal would pave the way for greater US direct investment in the country. “There have been times when it has been very difficult for US companies to do business in Russia. I want this project to be an example of what can be done,” Mr Lauder told the Financial Times.
