Alisher Usmanov, on the photo, and Vladimir Potanin are ready to prove that the private business may manifest the consolidating activities of the same extent as the government.
Photo: Stanislav Tikhomirov
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Big Business Teams Up
The first big merger is being staged in the metal industry of Russia. Alisher Usmanov and Vladimir Potanin are consolidating assets based on Metalloinvest and GMK Norilsk Nickel. Oleg Deripaska, who controls United RUSAL, has been also offered to join. The partners intend to invest from $50 billion to $60 billion, set up the world biggest mining and metallurgical company and oppose consolidating activities of the government. At the same time, they acknowledge the alliance with the state-run Rostekhnologii Corp. in the tender for Udokan deposit and count on support of the government.
Alisher Usmanov and Vladimir Potanin have announced they sealed a strategic partnership memorandum on behalf of their companies, Gallagher Holdings Ltd and Interros. The document provides for establishing a joint mining and metallurgical company based on Metalloinvest (Gallagher owns 50 percent) and GMK Norilsk Nickel (Interros holds roughly 30 percent).
Potanin said Interros would like to acquire 25 percent in Metalloinvest and addressed the company yesterday for the data needed for applying. Usmanov added that he welcomes Interros as investor. The sellers will be either all holders of Metalloinvest or Gallagher. Potanin and Usmanov refused to shed light even on the preliminary estimate of Metalloinvest. According to Alexander Pukhov from VTB, the analysts estimate the worth at $25 billion, but this estimate is too conservative and Metalloinvest’s capitalization probably exceeds $30 billion. So, Interros will need more than $7.5 billion to buy out the stocks.
At the same time, Usmanov is willing to buy “at least 5 percent to 10 percent in Norilsk Nickel” on the market and Gallagher is setting up a special subsidiary for this purpose. Usmanov didn’t specify whether Gallagher owns any stocks of Norilsk Nickel already. Given the yesterday’s quotes, Gallagher will spend $2.7 billion to $5.4 billion for GMK.
The partners will consolidate Metalloinvest and Norilsk Nickel in the next move. The sources say there are two scenarios, and the choice depends on United RUSAL (25 percent plus a stock in Norilsk Nickel). If RUSAL joins the consolidation, it will be carried out based on Norilsk Nickel assets with principal holders getting roughly 25 percent each in the united company. Otherwise, Metalloinvest will be the consolidating center and Usmanov and Potanin will have roughly 30 percent each. As to RUSAL, it will either have to sell its stake or confine to the status of minority holder at GMK, which will turn into Metalloinvest subsidiary.
www.kommersant.com
All the Article in Russian as of May 29, 2008
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