UPDATE: Russia Regulator Sees Potential Evraz, Severstal Merger As Negative
December 13 2011 - 9:57AM
Dow Jones News
A potential merger of Russia's two largest steelmakers, OAO
Severstal (CHMF.RS) and Evraz PLC (EVR.LN) is seen as negative by
the country's anti-trust watchdog, one of the regulator's top
officials told Dow Jones Newswires Tuesday.
The comment comes a day after the Financial Times quoted Evraz
Chairman Alexander Abramov as saying in an interview that the
companies' merger would be a "good idea."
The merger would lead to a reduction in competition in the
markets of rolled steel and certain grades of metallurgical coal,
head of the Federal Anti-Monopoly Service department of industry
and defense Maxim Ovchinnikov said in an emailed answer to the Dow
Jones Newswires' questions.
"We would be very skeptical to this deal if it took place,"
Ovchinnikov said later in a telephone interview. "It's hard to
imagine it."
The merger of Evraz and Severstal "is unlikely to bring about
any significant synergy to the companies, or an improvement of
production technology, and a minimization of costs as a result,"
Ovchinnikov said.
Ovchinnikov said the anti-monopoly service would only approve
the merger if the deal led to the stimulation of technological and
economic progress, or increased the competitiveness of Russian-made
products on the global markets. Severstal and Evraz would also have
to prove the customer would benefit from the deal, Ovchinnikov
said.
A Severstal spokesman declined to comment. An Evraz spokeswoman
couldn't immediately comment.
-By Nadia Popova, Dow Jones Newswires; +7 495 232-9198,
nadia.popova@dowjones.com