Holders of RusAl to get 66% in merged RusAl, SUAL, Glencore

MOSCOW, Oct 9 (Prime-Tass) -- The shareholders of Russia's largest aluminum producer RusAl are expected to get a 66% stake in a company that will be formed as a result of its merger with the country's second largest aluminum maker SUAL and Swiss commodities trader Glencore, Viktor Vekselberg, a co-owner of SUAL and the chairman of its board of directors, said Monday at a joint news conference of RusAl, SUAL and Glencore.

The shareholders of SUAL will get 22% in the merged company, called United Company RusAl, while Glencore's shareholders will get a 12% stake, he said.

The united company is not expected to change shareholders during the next five years, Vekselberg said.

The companies officially announced at the conference that they would merge. They are expected to form the world's largest aluminum producer.

Vekselberg said that he hoped the merger would be cleared by antitrust authorities by April 1, 2007.

The merged company is expected to make an initial public offering (IPO) on international markets in 18 months, Vekselberg said.

In particular, the merged company's shares may be floated in London, he added.

RusAl CEO Alexader Bulygin will be the merged company's CEO, while SUAL President Brian Gilbertson will be chairman of the its board of directors, Vekselberg said.

United Company RusAl's board will include six RusAl representatives, three SUAL representatives, one member from Glencore and two non-executive directors, RusAl said in a press release Monday.

United Company RusAl will own the aluminum and alumina assets of RusAl, SUAL and Glencore, RusAl said.

RusAl and SUAL focus on aluminum and alumina production, while Glencore, in addition to aluminum and alumina assets, also holds interests in zinc, lead, copper, nickel, cobalt, ferroalloy, coal and oil assets, as well as in agribusinesses. It was not clear what will happen to Glencore's non-aluminum and non-alumina assets.

United Company RusAl is expected to annually produce approximately 4 million tonnes of aluminum and 11 million tonnes of alumina, RusAl said.

The company will account for approximately 12.5% of global aluminum output and 16% of global alumina production, RusAl added.

Meanwhile, Bulygin said that the company was projected to annually produce 5 million tonnes of aluminum in three and a half years.

The company is expected to have annual revenue of U.S. $10 billion, Bulygin said.

The merged company is expected to invest $3 billion to $3.5 billion in production over a period of five years, he said.

RusAl, which is the third largest aluminum producer in the world, accounts for 75% of Russia's primary aluminum output and 10% of the global primary aluminum production.

SUAL produced more than 5.4 million tonnes of bauxite, 2.2 million tonnes of alumina and 1 million tonnes of primary aluminum in 2005.

Glencore's sales revenue amounted to $91 billion and its net profit totaled $2.6 billion in 2005, according to Bloomberg. Glencore has business operations in Peru, Kazakhstan, Zambia, Australia, Sweden and the U.S.