United Company RUSAL, the world’s largest aluminium and alumina producer, and ONEXIM Group, the largest shareholder in MMC Norilsk Nickel, the world’s leading base metals and PGM producer, have signed an agreement whereby UC RUSAL will acquire from ONEXIM a 25% plus one share interest in Norilsk Nickel, and ONEXIM will become an 11% shareholder of the enlarged UC RUSAL with the balance of the consideration to be paid in cash. ONEXIM will also gain a representation on the UC RUSAL Board of Directors. The transaction is conditional upon non-acceptance of an offer to buy 25% of Norilsk Nickel made by ONEXIM to Vladimir Potanin.
UC RUSAL and ONEXIM recognise the benefits of diversification and consolidation in the global metals and mining industry, which provide the scale and scope to allow the enlarged company to compete more effectively with the newly emerging global majors. Diversification will reduce the company’s dependence on individual commodity cycles, provide more stable cash flow, greater financial flexibility and enhanced opportunities to implement large-scale projects. This transaction will open new opportunities for the enlarged UC RUSAL to implement its development plans in the global metals and mining sector and enhance its ability to consolidate the mining and metals industry in Russia and internationally.
Alexander Bulygin, Chief Executive of UC RUSAL said: “This strategic transaction paves the way to develop the enlarged UC RUSAL into a global, diversified metals, mining and energy group. UC RUSAL has created a solid platform to implement its strategy of growth and diversification supported by our strong competitive advantages. Russia is an exceptionally resource rich country and it is entirely appropriate that the country’s industry leader achieves global major status.”
Dmitry Razumov, Chief Executive of ONEXIM Group, said: “The potential combination of RUSAL and Norilsk Nickel into a Russian metals and mining giant, with leading positions in global aluminium, nickel and platinum group metals markets, with significant long-term growth perspective, will provide superior value to both companies’ shareholders. This breakthrough transaction in the Russian metals and mining industry is also consistent with ONEXIM’s strategy to achieve high growth and high return of its investments.”
RUSAL (www.rusal.com) is the global leader in the aluminium industry, accounting for approximately 12% and 15% of global production of aluminium and alumina, respectively. The company was founded in March 2007 through the merger of RUSAL, SUAL, and the alumina assets of Glencore. UC RUSAL sells its products in 70 countries worldwide and employs 100,000 people in 19 countries, across five continents.
ONEXIM Group, a private investment fund with over $25 billion in assets, was founded in 2007 and has a diversified portfolio of investments in the metals and mining sector, energy, including fuel cell and nanotechnology, financial services, media and real estate.
MMC Norilsk Nickel (www.nornik.ru) is the largest public metals and mining company in Russia and the world’s largest producer of nickel and palladium and one of the world’s largest producers of platinum and copper. Production assets of the company are located in Russia, Australia, Botswana, Finland, South Africa and the USA. The company employs over 80,000 people.