Usmanov Seen Buying Into Norilsk

Billionaire Alisher Usmanov's iron and steel firm, Metalloinvest, has bought 3 percent to 4 percent of the shares in metals giant Norilsk Nickel in an early merger move, Kommersant reported Monday.

The newspaper, which is owned by Usmanov, quoted unidentified banking sources as saying the move may help one of Norilsk's top shareholders, Vladimir Potanin, to avoid a hostile takeover by aluminum magnate Oleg Deripaska.

Norilsk was not immediately available for comment.

Metalloinvest would neither confirm nor deny the report. "We are not commenting on this," spokeswoman Yulia Mazanova said.

Metalloinvest has expressed interest in a proposal to create a national mining champion by merging with Norilsk and said its own assets were worth $30 billion.

Metalloinvest manages the assets of holding group Gazmetall, which include the country's two largest iron ore mines and two steel mills that rank the company fifth in terms of output.

Norilsk, which mines one-fifth of the world's nickel, has a stock market value of $55 billion. Its ownership is muddied by a protracted asset split between its two co-owners and former business partners, Potanin and Mikhail Prokhorov.

Prokhorov has agreed to sell 25 percent plus one share to Oleg Deripaska's United Company RusAl. RusAl has stated its intention eventually to effect a full merger between the two companies.