Uralkali, Silvinit Holders Approve $1.4 Billion Merger
07 February 2011 - 10:26PM
Dow Jones News
Shareholders of Russian fertilizer producers OAO Uralkali
(URKA.RS) and Silvinit (SILV.RS) have approved the companies' $1.4
billion merger, to create the world's No. 2 potash producer after
Potash Corp. of Saskatchewan (POT), Uralkali said Monday.
The deal comes after the Canadian government blocked BHP
Billiton Ltd.'s (BHP) $39 billion bid for Potash Corp. in November.
Profits at fertilizer producers have been rising at a time of
increasing anxiety about global grain inventories and a surge in
prices for such crops as wheat, corn and soybeans.
According to the transaction terms, Uralkali will buy about 20%
in Silvinit for $1.4 billion and will purchase the rest of the
company through an issuance of new shares. The merger is expected
to be completed in May, subject to regulatory approvals.
"We are excited about the creation of a leader in the global
potash sector and the opportunities that will arise in this highly
dynamic industry for the combined group," Uralkali Chief Executive
Officer Pavel Grachev said in a statement.
The management of the two companies, which had been one entity
prior to privatization in the 1990s, expect to achieve synergies of
$100 million a year from the merger by 2013.
-By Nadia Popova, Dow Jones Newswires; +7 495 232-9198;
nadia.popova@dowjones.com