Uralkali sets up Web site to promote merger

Berezneki, Russia-The management of Russian potash companies Uralkali and Silvinit have set up a Web page dedicated to their merger. The Web site http://urkasilv-merger.com covers the proposed merger between the two companies in both English and Russian. The merger was first announced December 20, 2010 (see GM, Jan. 3, 2011). The shareholders of the two companies will vote Feb. 4 on the merger proposal. According to the Web site, shareholders will be voting to allow Uralkali to acquire 1,565,151 Silvinit ordinary shares, representing about 20 per cent of its ordinary share capital, at a price of US$894.50 per ordinary share. Holders of Silvinit stock will receive 133.4 ordinary Uralkali shares for each ordinary share of Silvinit and 51.8 ordinary Uralkali shares for each preferred share of Silvinit. The share transfers are expected to be completed by the end of February if the shareholders of both companies agree to the deal. The Russian Federal Antimonopoly Service is expected to approve the deal. “We are working with both companies and the group of owners for a long time,” the head of the FAS, Igor Artemyev, told local media last month. “Our attitude to the deal is positive.” The FAS is also expected to address concerns that the merger could cause a run-up in potash prices in Russia. Artemyev said the FAS might issue a resolution limiting the growth of potash prices. He did not rule out the possibility that the price could be fixed for a set number of years. Uralkali is expecting all statutory requirements for the merger to be completed by the end of June 2011. When the merger is complete, Silvinit will cease to exist. The merged company will retain the Uralkali name, with shares traded in Moscow and global depositary receipts in London. The value of the new company based on share values of December 17, 2010 would be US$23.9 billion. Merging and eliminating duplicate functions is expected to save the new company about US$100 million per year. The savings are expected to kick in by 2013. The merger would make Uralkali the second largest potash producer in the world.