OREANDA-NEWS. September 10, 2009. The Solvay Group, one of the world’s largest soda producers, signed a EUR160m (for enterprise value) agreement to purchase a majority stake (c90%) in Bereznikovsky Sodovy Zavod, which had 17.9% of the Russian soda's market in 2Q09, reported the press-centre of Otkritie FC.

View: Solvay estimated Bereznikovsky Sodovy Zavod to be at a 100% premium to the market (for \\$500/t of existing capacity). We think that this news should be a catalyst for growth in the company’s market cap of Russia’s biggest soda producer, Soda Sterlitamak, which has a production capacity of 2mt). Based on this M&A deal, Soda's market cap could approximate \\$1bn, which is twice its current market valuation.

Valuation:  According our estimates, Soda's stock trades at a 2009 EV/EBITDA of 3.6x, which is 2 times cheaper than foreign peers.