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Official: Russian giant to create world's biggest aluminum producer, deal to be unveiled in fall

Official: Russian giant to create world's biggest aluminum producer, deal to be unveiled in fall

Russia's biggest aluminum producer, OAO Rusal, will take over local rival Sual Group and the alumina assets of Swiss-based commodities trader Glencore International AG to become the world's biggest aluminum producer, an official close to the negotiations said Wednesday.The official, who declined to be identified due to the sensitivity of the talks, said that the all-share deal would be officially announced in October and would give Rusal 64.5 percent in the combined company and Sual and Glencore 21.5 percent and 14 percent, respectively.
Spokesmen for Sual, Rusal and Glencore declined to comment.
The official said that a stake in the new business would be sold on a foreign stock market three years after the company was created. Rusal would pick the company's management team while Sual would be allowed to select the chairman of the board of directors, the official said.
According to a report Wednesday in the Financial Times, which cited a nonbinding agreement signed Friday by the parties, the company formed would have an annual output of 4 million metric tons of aluminum and 11 million metric tons of alumina, the raw material used to produce aluminum. The paper said the deal would be worth US$30 billion (23.42 billion) (euro23 billion).
News of the deal, which has been in the works for the past 18 months, comes as Russia seeks to extend its reach into global markets and just months after Severstal's failed bid to become the worlds biggest steel producer by merging with Luxembourg-based Arcelor.
The deal would create a monopoly in Russia but it reportedly has the support of the Kremlin, which would enable it to overcome any regulatory hurdles.
Rusal owner Oleg Deripaska and Sual's Viktor Vekselberg have had their fortunes valued by Forbes magazine at US$7.8 billion (euro6 billion) and US$10 billion (euro8 billion), respectively.
Dmitry Kolomytsyn, an analyst at the Moscow brokerage Aton Capital, said that Rusal's Tuesday announcement that it had started buying out minority shareholders in its subsidiaries suggested it was "preparing for the deal."


Updated : 2021-10-17 03:25 GMT+08:00