OREANDA-NEWS. On November 23, 2007 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, announced that they have signed an agreement whereby UC RUSAL will acquire from ONEXIM a 25% plus one share interest in MMC 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, reported the press-centre of UC RUSAL.

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 recognize 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, commenting on the transaction, 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 UC RUSAL and MMC 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.”
“We hope that this combination will be supported by other shareholders, management, and employees of MMC Norilsk Nickel,” both CEOs added.

UC RUSAL has already received a commitment letter from ABN Amro, BNP Paribas, Credit Suisse, and Merrill Lynch to provide a credit facility to finance the cash component of the consideration.

UC RUSAL and ONEXIM expect to complete the transaction in the first quarter of 2008, subject to the approval of the relevant antitrust regulatory authorities in Russia and internationally.