Norilsk in Talks With Usmanov

Norilsk Nickel will start talks with the management of iron-ore and steel producer Metalloinvest on combining the two companies.

The Norilsk board of directors met Friday and agreed to begin negotiations on a possible merger, Norilsk spokeswoman Yelena Kovalyova said by telephone on Sunday.

"Metalloinvest said they are ready to provide all information to facilitate this deal," she said.

Metalloinvest owner Alisher Usmanov, whose assets also include Kommersant newspaper and a stake in London football club Arsenal, said on Feb. 21 that he wanted to combine Metalloinvest with Norilsk. The deal would create an $85 billion metals company, Metalloinvest chief executive Maxim Gubiyev said at the time.

Norilsk is being advised on the deal by UBS, while Dresdner Kleinwort, a unit of Dresdner Bank, is advising Metalloinvest.

Usmanov's bid comes as United Company RusAl, majority-owned by Oleg Deripaska, closes a deal to buy a blocking stake in Norilsk and is seeking to take control of the nickel producer.

Merrill Lynch, one of the banks that helped to finance RusAl's bid for a stake in Norilsk, and Credit Suisse are advising RusAl on its bid for majority control of the firm, The Independent on Sunday newspaper reported.