Norilsk's CEO Puts Own Firm at Core of Mergers

Norilsk Nickel should be at the core of any potential merger with one or more privately owned Russian miners, its chief executive said in an interview published Monday.

Denis Morozov told Kommersant that Norilsk was in the early stages of evaluating a merger proposal from Metalloinvest, the iron-ore and steel firm controlled by billionaire Alisher Usmanov, but had received no concrete proposal from United Company RusAl.

"Theoretically, anything is possible. But in my view, if such deals are possible, then it would only be on the basis of Norilsk Nickel," Morozov said.

While Norilsk, the world's largest nickel miner, is open to potential merger proposals, Morozov said speculation unaccompanied by an official approach could lead to share-price volatility.

"This creates unpredictability and potential risks, most of all for our minority shareholders," he said.

Norilsk's market capitalization is currently $51.9 billion. Its stock, though more than double its worth two years ago, has fallen about 15 percent from its peak in November.

Billionaire Mikhail Prokhorov has agreed to sell his 25 percent-plus-one-share stake in Norilsk to RusAl as part of a wider division of assets with his former business partner and another large shareholder in Norilsk, Vladimir Potanin.

RusAl, which is majority-owned by Oleg Deripaska, the richest Russian according to Forbes, has stated its long-term intention to effect a merger of the two companies, and Russian media have speculated that talks to this end have already begun.

Morozov said in the Kommersant interview that RusAl had yet to become a shareholder in Norilsk.

"I can't comment on RusAl's plans because we have not received any proposals from this company. It's a private company, so we do not have sufficient information to evaluate the merit of any possible combination," he said.

He said Norilsk's management would evaluate Metalloinvest with the help of an external consultant.

"We can't say when exactly this process will be completed, because the exchange of information only began a short time ago," he said.