ZURICH, April 9 (Reuters) - Sulzer has agreed to buy five million of its own shares from its largest shareholder, Renova Holdings, whose Russian chairman Viktor Vekselberg has appeared on a list of U.S.-sanctioned individuals.
The Swiss engineering company took the action to prevent it from being hit by U.S. sanctions after the U.S. Department of the Treasury's Office of Foreign Assets Control identified Vekselberg and his Renova Group, Moscow, as specially designated nationals on April 6.
Although the Winterthur-based company said it had not been contacted by U.S. authorities, after taking legal advice it decided to reduce the holding of Renova, which held 63 percent in Sulzer, to prevent problems arising in the future.
Following an emergency board meeting on Sunday, Sulzer made a binding agreement for Renova to transfer ownership to Sulzer of five million Sulzer shares, equivalent to 15 percent of its outstanding stock.
Sulzer said it would buy the shares at the volume-weighted average share price between Monday and Friday. At Friday's closing share price of 126.3 francs, the deal would have a value of 631.5 million Swiss francs ($658 million).
"Sulzer is in close contact with authorities and believes that this transaction will assuage any concern as to the independence of Sulzer from the Renova Group," the company said.
A company spokesman said no decision had been made on what to do with the shares, which would be assigned to its treasury.
After completion Renova will be a 48.83 percent shareholder in the company, Sulzer said. ($1 = 0.9599 Swiss francs) (Reporting by John Revill; Editing by Michael Shields)