Merger of Uralkali and Silvinit could create new global champion
By Will Beacham on 17 August, 2010 in Uncategorised
Russia is moving closer to creating a new national fertilizer champion, with Russian metals magnate Suleiman Kerimov’s Uralkali and Silvinit, Russian potash producer, expected to merge in the near future, according to rt.com.
Kerimov bought a controlling stake in agro-chemicals giant Uralkali, and now two offshore firms, that are believed to be close to Kerimov, have bought 44% of Silvinit, the country’s largest potash producer. This will be most likely added to those 25% in Silvinit Kerimov already owns, according to the report.
Uralkali will launch a take-over bid for the unlisted Silvinit, which is expected to happen in the coming days. It would create the world’s second biggest potash producer, but Dmitry Baranov, an analyst from Finam, believes the Russian anti-monopoly service will allow the deal with certain provisions.
“The Federal antimonpoly service will issue detailed instructions concerning a deal to merge Silvinit and Uralkali. Even if a structure with offshore companies is used. There will be strict limits for domestic pricing, with exports accounting for 80-90% of the companies’ profits.”
Agro chemicals are the third biggest export item for Russia after fuel and metals, and the government is keen to encourage its growth. The merged company of Uralkali and Silvinit would hold 30% of global potash reserves and 40% of global exports.
In June, ICIS news reported that Russia’s Madura Holding had sold a controlling stake in Uralkali. Madura sold 53.2% of Uralkali’s shares to Kaliha Finance Limited, Aerellia Investments Limited and Becounioco Holdings Limited. Kaliha acquired the largest stake of Uralkali – 25% of the company’s share capital, according to the same sources. No financial details were disclosed.
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