Russian potash producers Uralkali and Silvinit in $24 billion merger plan
21 Dec 2010
Russian fertiliser companies Uralkali and Silvinit, the world's fifth and sixth-largest potash fertiliser producers, yesterday announced their plans to merge - a move that would create a $24 billion company and the world's second-largest potash producer behind Canada's Potash Corp of Saskatchewan.
The two companies have been widely tipped to merge after Russian billionaire Suleiman Kerimov and investors acquired controlling stakes in both the potash companies earlier this year.
The announcement comes after Anglo Australian miner BHP Billiton attempted to take over Potash Corp for $39 billion in October, which has sparked a new round of consolidation in the potash mining industry.
Last month, Germany's K+S AG, Europe's largest potash producer, agreed to buy Canada's Potash One Inc, for C$434 million ($427 million).
Berezniki-based Uralkali will initially buy a 20 per cent stake in Silvinit for $1.4 billion in cash and will acquire the rest of Silvinit through an issuance of new shares, valuing Solikamsk-based Silvinit at $7.8 billion.
Silvinit shareholders will receive 133.4 Uralkali ordinary shares for each ordinary share held in Silvinit and 51.8 Uralkali ordinary shares for each preferred Silvinit share, valuing Silvinit shares at a 45 per cent discount to Uralkali.
