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. Last Updated: 07/27/2016

Usmanov Firm Mulls Steel Merger

Steel and iron producer Metalloinvest is discussing a possible merger with steelmaker Severstal, the general director of Metalloinvest said Tuesday.

Maxim Gubiyev also told reporters Metalloinvest, which supplies more than a third of the country's iron ore and is owned by billionaire Alisher Usmanov, might conduct an initial public offering of shares at the end of 2008 or the start of 2009.

He told reporters that Metalloinvest and Severstal were looking at the possibility of tying up their capital.

"Indeed, we are having joint consultations," Gubiyev said in response to a question about a possible merger. "We are getting to know each other and looking at each other at the level of leadership and shareholders."

A source close to Severstal denied the company was in talks with Metalloinvest. The company offered no official comment.

"We don't have any agreements and we are not in any kind of negotiations about a merger with Metalloinvest," the source said.

Severstal, majority owned by billionaire Alexei Mordashov, is the country's largest steelmaker by volume when its U.S. and Italian assets are included.

In materials presented at the conference, Gubiyev said Metalloinvest and Severstal were the only two Russian steelmakers to be completely self-sufficient in iron ore supply.

Gubiyev told the conference Metalloinvest planned to invest $5 billion in the next five years to boost output of steel and iron ore.

Metalloinvest is also in talks with Ukraine's Industrial Union of Donbass about a possible merger.