Leading Russian aluminium companies agree to consolidation

The Russian Aluminium companies SUAL and Rusal are said to have an intent of merging. They are expected to make official statement about this deal in the middle of October. Currently the procedures of consolidations are still being worked out, and the two main options are the merger on Rusal basis and creating a new venture. In any case, the brands of SUAL and Rusal will remain on the market.

SUAL ranks among the top ten aluminium producers in the world. The group’s assets are owned by SUAL International, a company incorporated in the British Virgin Islands. The majority stake of the BVI company belongs to SUAL co-owners Viktor Vekselberg and Leonard Blavatnik. The minority stockholders are General Director of Komi Aluminum Vladimir Kremer and 1st Vice President of SUAL Holding Yevgeny Olkhovik. In 2005 SUAL produced 5.4 million tons of bauxite, 2.3 million tons of alumina and 1.05 million tons of aluminium; company sales totalled at $2.7 billion.

Rusal is controlled by Jersey company Rusal Ltd. , whose owner is Oleg Deripaska. In 2005, Rusal produced 5.7 million tons of bauxite, 3.9 million tons of alumina and 2.7 million tons of aluminium; the sales were $6.6 billion.

Although both SUAL and Rusal are declining to comment on the supposed deal, it is already known that in the result of the merger Deripaska will get 75% of the united company, and the remaining 25% will go to the co-owner of SUAL Vekselberg. For the major stockholder of the BVI company SUAL International, it will be good possibility to release funds for new chemistry, energy and utility projects. It is supposed that the consolidated venture will cost $22 billion, and Vekselberg’s stake is estimated at minimum $5.5 billion. This is the price of the 1st rank in the global aluminium market, as the expected deal will by no means create the world biggest aluminium maker.

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