UC Rusal, Nornickel Stop Merger Negotiations

30 November 2017 (14:16)

UrBC, Moscow, November 30, 2017. Oleg Deripaska and Vladimir Potanin stopped negotiating on a possible merger of UC Rusal and Nornickel, Nornickel’s President and primary owner Vladimir Potanin told Vedomosti.

‘Oleg and I agreed that UC Rusal and Nornickel are two different businesses and two different companies with no synergy between them whatsoever. This is why they will keep developing independently, in the medium run,’ Potanin said.

Oleg Deripaska’s representative told the newspaper a share in Nornickel was always seen as a potential strategic investment, and this view of the project hadn’t changed.

According to Potanin, he and Deripaska talked over the potential merger in the summer. The latter, however, ‘saw more synergy between UC Rusal and En+ and would rather consider consolidating these two assets with En+ as the core.’

‘He told me he was planning on an IPO, and you can now see that Glencore is trading some of its shares in UC Rusal for En+ ones,’ Nornickel’s President said.

The idea of a merger took root nearly a decade ago; in 2007, Vladimir Potanin and Mikhail Prokhorov started dividing their business assets. Potanin had meant to buy a controlling shareholding in Nornickel, but this never happened in the end. In the spring of 2008, UC Rusal announced they were going to get those shares in order to merge with Nornickel. The goal was to st up Russia’s largest mining and metallurgical company.

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