The Russian Aluminum
SUAL co-owner Viktor Vekselberg and Rusal owner Oleg Deripaska are said to have agreed about the merger. The deal that could be announced already this fall will create the world biggest maker of primary aluminum with the 100 percent share in Russia. Deripaska will get 75 percent in the united company, while Vekselberg will confine to 25 percent. For Deripaska, it will be implementing the dream of turning Rusal into the global leader, while Vekselberg will release funds for chemistry, energy and utilities projects and for boosting the asset split with Leonard Blavatnik, owner of Access Industries.
The protocol of intent to merge SUAL and Russian Aluminum (Rusal) has been sealed early this month, one of Vekselberg partners said on condition of anonymity. The official statement will be made in the mid.-October.
As the consolidation procedures haven’t been finally elaborated, the parties are studying two options now – the merger on Rusal basis or creating a new venture. But one thing is clear already. The stake of 75 percent will go to Oleg Deripaska, Viktor Vekselberg and his partners will get the remaining 25 percent, and the brands of Rusal and SUAL will survive the consolidation.
SUAL produced in 2005 5.4 million tons of bauxite, made 2.3 million tons of alumina and 1.05 million tons of aluminum; IAS sales stood at $2.7 billion, EBITDA was $600 million. The assets are owned by the British Virgin Islands-incorporated SUAL International, where Viktor Vekselberg and Leonard Blavatnik own the majority stake. The minority stakes belong to Komi Aluminum General Director Vladimir Kremer and SUAL Holding 1st Vice President Yevgeny Olkhovik.
In 2005, Rusal produced 5.7 million tons of bauxite, made 3.9 million tons of alumina and 2.7 million tons of aluminum; the sales were $6.6 billion, EBITDA – $2.2 billion. The company is controlled by the Jersey-incorporated Rusal Ltd of Oleg Deripaska.
The exact list of swapped assets hasn’t been made out so far. The source said Komi Aluminum (where SUAL and Rusal own 50 percent each) and, probably, SUAL’s Zaporozhie Aluminum Mill won’t merge into the united company at the first stage. But even without them, Vekselberg’s assets are estimated at $5.5 billion at the minimum, the source pointed out, signaling the consolidated venture will cost $22 billion.
One of the reasons of so high price is global leadership. In view of 2005 output, the united company is expected to make 3.7 million tons of alumina. Today’s leaders, U.S. Alcoa and Canadian Alcan, each produce 3.5 million tons a year.
The deal is said to have been OKed by the Kremlin already. The root cause of so prompt approval could be also the desire of gaining revenge for Severstal failure with Arcelor.
SUAL declined to comment yesterday. Rusal’s representative, Vera Kurochkina, made clear the company comments on no rumors. Nevertheless, a source with one of the companies said “Deripaska has been long dreaming of buying SUAL and the talks have been underway for nearly a year and a half.”
by
www.kommersant.com
All the Article in Russian as of Aug. 21, 2006
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