Shareholders of Russian fertilizer producer Uralchem confirmed on Dec. 2 that they have agreed to purchase a 20 percent stake in OAO Uralkali. The transaction is valued at approximately $2.9 billion based on Uralkali’s share price on the London Stock Exchange.
The Uralchem investors, led by billionaire Dmitry Mazepin who owns 95.2 percent of the company, said in a statement that they have agreed to buy shares and Global Depository Receipts (GDRs) in a deal that includes the Uralkali holdings of billionaires Anatoly Skurov and Filaret Galchev. The deal is expected to close in the near term.
“We believe in the fundamental attractiveness of the potash market and appreciate the leadership position held by Uralkali in this market,” Mazepin said in Uralchem’s statement. In a Dec. 2 press release addressing the Uralchem announcement, Uralkali said only that it is “not party to these sale and purchase arrangements.”
The news comes two weeks after Suleiman Kerimov agreed to sell his 21.75 percent stake in Uralkali to Russia’s Onexim Group (GM Nov. 25, p. 1), which is owned by another Russian tycoon, Mikhail Prokhorov. The Uralchem deal signals another step in the resolution of a month’s long conflict that began this summer when Uralkali announced that it would no longer direct its export potash sales through Belarusian Potash Co. (BPC), the long-standing joint marketing venture between Uralkali and Belarus producer OAO Belaruskali (GM Aug. 5, p. 1).
The dissolution of BPC ultimately led to the Aug. 26 arrest of Uralkali CEO Vladislav Baumgertner in Minsk on charges of abuse of power as chairman of BPC (GM Sept. 2, p. 1). Baumgertner was extradited back to Russia from Belarus on Nov. 22 (GM Dec. 2, p. 10), and is currently being held in a pretrial detention center.