Metalloinvest Mulls a Norilsk Merger

Metalloinvest, the iron ore and steel company owned by billionaire Alisher Usmanov, will consider a proposal to merge with metals giant Norilsk Nickel, the company's general director said Thursday.

Maxim Gubiyev told reporters that he expected Metalloinvest to be valued at no less than $30 billion by the end of 2008, a year in which earnings before interest, taxation, depreciation and amortization, or EBITDA, are seen rising to about $3.5 billion.

Dresdner Kleinwort has sent a proposal to Interros, a key shareholder in Norilsk, about the possible merger of Norilsk's assets with those of Usmanov.

Norisk's board has authorized its management to study the proposal, which may eventually create a new world mining and metals giant.

"Dresdner did not make the proposal to Usmanov, but there is nothing strange in the fact that they saw some future in merging Metalloinvest mining company with Norilsk Nickel mining and metals company," Gubiyev told a news briefing.

"For us, it would be an interesting development. The more we think, the more we feel: Why not try it?"

Gubiyev said he expected Metalloinvest's 2007 revenues to exceed $7 billion, up more than 40 percent on the previous year. He said Metalloinvest planned this year to invest $1.15 billion in its development, up from $715 million last year.