Over in Russia, a Counter-Revolution is quietly brewing.
While you may not hear much about it in the U.S. news media, President Putin's vision of the "dictatorship of law" is taking shape step by step -- in the form of natural gas giant Gazprom (OTC BB: OGZPF). Over more than a decade, the company has built itself into the Slavic version of America's Berkshire Hathaway
Gazprom began as a partially privatized version of the Soviet Ministry of the Oil and Gas Industry. It pulled oil and gas out of the ground. Refined it. Distributed it. Exported it. But my, how this "little" company has grown. Today, Gazprom doesn't just do hydrocarbons -- although truth be told, it would have its hands full just concentrating on that. The company does, after all, produce 94% of all natural gas extracted in Russia proper, and controls 25% of the world's natural gas reserves.
But the company also owns a majority stake in a bank, Gazprombank. It's got a telecom subsidiary, Gaztelekom. In all, Gazprom controls more than 50 subsidiaries in their entirety, and has majority ownership of 40 more. No, make that 41.
Because on Friday, news broke that Gazprom-Media has purchased a majority interest (50.2%) in one of Russia's leading newspapers -- Izvestia. Along with Pravda, Izvestia was probably the best-known Soviet paper in the West during the Cold War, and remains the country's most popular daily newspaper with a general news focus. Two other papers, Vedomosti (owned in part by Dow Jones
With its latest buy, Gazprom fills the one gap that had remained in its media inventory. In 2001 -- some say at the Russian government's behest -- the company took control of two media outlets that had been critical of Kremlin policy on the Chechen conflict: radio station Ekho Moskvy and the last independent national television channel, NTV.
So let's make a list here: energy, telecom, banking, media. Slowly but surely, Gazprom is controlling more and more elements of the Russian economy. In some respects, the company is beginning to resemble a mutual fund, or at least a conglomerate in the Berkshire/GE mold.
That could make Gazprom into an interesting play on the Russian economy as a whole as the Kremlin moves forward with its plans to cement a controlling stake in Gazprom for itself, then permit the company's shares to trade freely on international markets.
Fool contributor Rich Smith owns no shares in any of the companies mentioned above.