Russia approves RUSAL, SUAL aluminium merger

Russia's anti-monopoly service has formally approved a merger of aluminum giants RusAl and SUAL, and the alumina assets of Glencore, a deputy head of the service said, according to RIA Novosti.

The two Russian companies and Switzerland-based Glencore signed an agreement October 9 on consolidating their assets to create the world's largest aluminum producer, United Company Russian Aluminum. The deal received the backing of RusAl and SUAL shareholders toward the end of last year, and was in principle approved by anti-monopoly authorities last month.

The enlarged corporation is to become the new leader in the global aluminum and alumina production industry, with operations in 17 countries on five continents and more than 110,000 employees. The new giant is expected to promote Russia's international economic integration and strengthen its influence on world markets.

Andrei Tsyganov said the import customs duty on primary aluminum must be abolished to ensure fair competition on the market with advent of the new influential player.

RusAl, SUAL and Glencore said in a joint news release they were happy with the anti-monopoly authorities' decision. The news release also said the European Commission, and anti-monopoly authorities in Ukraine, Montenegro and Turkey had already authorized the merger.

RusAl Vice President Valery Draganov said the merger would be completed by April 1, 2007. He said the management of the new company would run United Company Russian Aluminum de facto from early March, and added the company had been operating in accordance with a unified business plan from 2007.

The corporation's total production capacity will be 4 million tons of aluminum and 11 million tons of alumina. The united company will command 12.5% of the global primary aluminum market and 16% of the worldwide alumina market.