Shareholders of two Russian major fertilizer producers, Uralkali and Silvinit, have approved their merger to create one of the world's largest potash producers by May 2011, Uralkali said on Monday.
Uralkali shareholders approved the purchase of about 20% of Silvinit and deals to finance the purchase, Uralkali said in a statement.
Earlier in December, Uralkali said the deal would involve $1.4 billion in cash and a share swap.
The merger is structured in two stages.
Under the first stage, Uralkali will buy 20% of Silvinit for $1.4 billion and under the second stage, it will issue shares to swap them for Silvinit's ordinary and preferred stock. Silvinit's shareholders will get 133.4 Uralkali ordinary shares per each Silvinit's ordinary share and 51.8 Uralkali's ordinary shares per each Silvinit preferred share.
The boards of directors of the two companies recommended conducting the second stage without additional bonuses and set the share exchange ratio on the basis of estimates of independent experts.
Uralkali will also issue debut three-year bonds worth 50 billion rubles at the MICEX via a public subscription.
Silvinit will cease to exist as a result of the deal, while Uralkali's net profit per share will rise within a year after the merger.
After the deal, Uralkali ordinary shares will be traded at the RTS and MICEX, while global depositary receipts, each covering five ordinary shares, on the London Stock Exchange.
Market capitalization of the two companies combined amounted to $23.9 billion as of December 17.
MOSCOW, February 7 (RIA Novosti)
