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. Last Updated: 07/27/2016

EU Clears Way for UC RusAl Merger

bloombergA worker pouring aluminum at a RusAl mill. The firm's merger with SUAL and Glencore may be completed by April.
BRUSSELS, Belgium -- EU regulators on Thursday cleared EN+, the owner of Russia's biggest aluminum producer RusAl, to absorb rival SUAL and the aluminum assets of Switzerland-based commodities trader Glencore, creating the world's biggest aluminum company.

The European Commission said the deal would not significantly impede competition in Europe because the new company would continue to face "effective" rivalry.

The company to be called United Company RusAl will control some 12 percent of global output with its activities stretching across four continents, binding together mines in Jamaica, refineries in Ireland, Jamaica and Italy, a Swedish smelter and all stages of aluminum production in Russia and Ukraine. Under the terms of the agreement, RusAl will issue new shares to acquire SUAL, which is controlled by Viktor Vekselberg, as well as the Glencore assets.

The EU investigated the supply chain for bauxite and aluminum products, but said market shares would be "well below a level" where it could try to control the market for any of these. Glencore will keep some bauxite and other activities and have a representative on the board of the new company. EU regulators said this should not pose an anti-monopoly problem because neither Glencore nor the new company had a large share of these markets and could not restrict competition by coordinating their behavior.

RusAl CEO Alexander Bulygin said EU approval was "a major milestone" toward completing the deal -- due to be wrapped up by April.

RusAl said the deal still needed a final rubber stamp from Russia and four European countries it did not name. The Federal Anti-Monopoly Service cleared the deal on Jan. 17.