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Gazprom, Suek agree on merger terms

Gazprom, Suek agree on merger terms

Natural gas giant OAO Gazprom and Russia's biggest coal producer agreed to merge their electricity and coal assets in a deal that also gives Gazprom a majority stake in the coal giant, the companies said Tuesday.
Dmitry Medvedev, first deputy prime minister and chairman of Gazprom's board, gave his immediate blessing to Gazprom's merger with Siberian Coal Energy Company.
The deal is for "the good of the country," he was quoted as saying by Russian news agencies.
Under the agreement, Siberian Coal _ also known as SUEK _ will issue additional shares to be purchased with electricity assets owned by Gazprom subsidiaries. Gazprom will thereby gain a stake of 50 percent plus one share in the coal giant, the companies said in a joint statement.
The merger, between assets of the world's largest gas company and the provider of almost one-third of the coal used by Russia's power plants, has been a subject of concern with anti-monopoly authorities.
Then-Economics Minister German Gref last year also spoke out against the proposal, saying it could be harmful for competition.
Russian news agencies quoted Medvedev, who is expected to succeed Vladimir Putin as president in Sunday's election, said the merger will help Gazprom lessen its dependence on gas reserves in supplying its electricity assets.
The companies expect to complete the asset merger by Aug. 31, pending regulators' approval.
Under Putin, energy resources have come under increasingly centralized state control, and the merger would further consolidate that trend.
Gazprom, meanwhile, has sought to expand its interests in the power sector as part of a bid to become a global-level vertically integrated energy company.
The proposed venture will have 11 board members, with five representatives from Gazprom, four from Siberian Coal and a two independent members, the statement said.
Auditor Deloitte last year valued Siberian Coal's coal and electricity assets at between US$6 billion (4 billion) and US$8 billion (5.4 billion). It also calculated that the total worth of the merged company could reach $16 billion.


Updated : 2021-07-24 00:04 GMT+08:00