Shareholders approve Russian potash merger
The shareholders of two Russian chemical giants have approved a merger that will create the world's second-largest producer of potash fertiliser, one of the companies said Monday.
The merger between Uralkali and Silvinit was approved by both companies' shareholders on Friday, Uralkali said in a statement, with the firm acquiring a nearly 20-percent stake in Silvinit for $1.4 billion (1.0 billion euros).
Uralkali said the deal should be completed in May, with the merger creating a giant responsible for 19 percent of the world's potash production, placing it second behind Canada's Potash Corp, which has a 23-percent share of the market.
Uralkali is Russia's second-largest potash producer behind Silvinit. The two companies' boards approved the deal in December.
"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.
Silvinit CEO Vladislav Baumgertner for his part said he was happy to see that the two companies had "strongly endorsed the logic of the merger."
Russia is the world's second-largest producer of potash behind Canada and ahead of Belarus, according to the United States Geological Survey.
The importance of potash fertiliser has soared over the last years owing to mounting demand for food in the world. Rapidly-expanding China, which has expressed an interest in Potash Corp in light of a bid from Anglo-Australian mining giant BHP Billiton, is a major importer of the product.
© 2011 AFP