"Uralkali" and "Silvinit", announced the merger at the end of last year, opened the first joint operating results for 2010. Their combined output of potassium was more than 10 million tons, which corresponds to the pre-crisis level and about 20% of world production. The companies expect further growth in demand. Will increase and prices: according to analysts, the average spot price in 2011 is $ 450 versus $ 350 in 2010.
Russian potash producers "Uralkali" and "Silvinit" revealed the production figures for 2010. "Uralkali" has increased the production of potassium chloride by almost half, to 5.1 million tons. The volume of production of "Silvinit" amounted to 5.2 million tons of potassium, which is 1.5 times higher than in 2009. "Thus, both companies have restored production to a record pre-crisis level", — the "Y" in the "BRIC".
"Silvinit" — Russia's largest producer of potassium, develops Verkhnekamskoye potassium and magnesium salts. Net income under IFRS for 2009 — 10.517 billion rubles. In 2009, produced about 3.5 million tonnes of potash. "Uralkali" — the country's second producer of potassium chloride. In 2009, he released 2.6 million tons, IFRS net profit — 9.1 billion rubles.
In late December, "Uralkali" announced their intention to merge with "Silvinit". The company intends to buy 20% stake in a competitor for $ 1.4 billion (at $ 894.5 per share), and then attach it to yourself through the conversion of shares. The "Silvinit" will cease to exist. Shareholders of both companies have approved the transaction on February 4, and by the end of the month "Uralkali" is going to complete the purchase of 20% shares of "Silvinit". The subsequent conversion of the shares will be based on the evaluation of the company at $ 7.8 billion, that is, without a premium to the market, informs "Kommersant".
After the announcement of this Association for the Protection of Investors' Rights reported that a number of minority shareholders unhappy with the share exchange ratio. At the same time, the ISS (an independent consultant to provide advice to investors) supported the merger. He considered that "the deal has advantages, even if viewed only from the point of view of the strategic attractiveness", and it would be beneficial to shareholders "Silvinit" who will receive a share in a larger, more transparent companies with high liquidity.
President and CEO of "BRIC" Grachev said that in the future the combined company intends to increase production to meet the growing demand for potash by increasing capacity at existing mines and develop new areas of Verkhnekamsk. General Director of "Silvinit" Vladislav Baumgertner believes that 2010 "can be called a year of recovery potash industry." According to him, the demand has increased significantly, and there are grounds for further increase. "Silvinit" forecasts the global market for potassium in 2011 to 55-60 million tons. The main consumers will be China, India, Brazil and South East Asia.
Mikhail Stiskin of "Troika Dialog" agree that the operating results of "BRIC" and "Silvinit" reflect a gradual recovery in the chemical market. By capacity combined company now ranks second behind Canada's Potash Corp. and, according to the analyst will be able to keep it in the long run. Mr. Stiskin estimates the average price for potash on the spot market in 2011 at $ 450 per ton. In 2010 it was about $ 350.