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 Federal Anti-Monopoly Service [formally] approved the deal today," Andrei Tsyganov said, and hailed the companies' cooperation.
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.
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.
"To make sure that market remains open after the new player emerges, it would be sensible to cancel the import customs duty on primary aluminum," he said, adding the proposal had already been backed by the economics ministry and other agencies.
RusAl, SUAL and Glencore said in a joint news release they were happy with the anti-monopoly authorities' decision.
"Today's decision of the federal authorities has huge importance as it provides support for the first Russian transnational corporation, which will become the world's new leader in this sector," the news release quoted RusAl Director General Alexander Bulygin as saying. He added the deal would be closed some time soon.
The news release said the European Commission, and anti-monopoly authorities in Ukraine, Montenegro and Turkey had already authorized the merger.
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.
RusAl said in December that its shareholders would hold a 66% stake in United Company Russian Aluminum, SUAL would control 22%, and 12% will belong to Glencore, an international supplier of a wide range of commodities and raw materials to industrial consumers.
Founded in March 2000 following a merger of major aluminum plants in the former Soviet Union, RusAl holds 75% of the Russian market and 10% of the international market. The company exports aluminum to 50 countries and operates in nine Russian regions and 13 countries.
One of the world's top 10 aluminum companies, SUAL has enterprises in nine Russian regions and in Ukraine, and annually mines over 5.4 million metric tons of bauxite, some 2.3 million metric tons of alumina, over 1 million tons of primary aluminum, and about 60,000 metric tons of silicon. It also manufactures aluminum products, including foil, wire, and wheel rims, and exports 80% of its production.
