Roman Abramovich, Russia's richest oligarch and owner of Chelsea Football Club, is poised to buy a 40 per cent stake in Evraz, Russia's largest steel producer, for at least $3 billion (€2.35 billion) in a deal that could trigger further industry consolidation.
A spokesman for Alexander Abramov, founder and majority shareholder in Evraz, whose shares are listed on the London Stock Exchange, said negotiations were advanced. The deal, which could be announced in the next few weeks, would be Mr Abramovich's first large investment in Russia since he sold his aluminium and oil assets.
The news comes only days after Luxembourg steelmaker Arcelor announced a plan to buy Russia's Severstal to form the world's biggest steelmaker. Industry observers said the involvement of Mr Abramovich, whose fortune is estimated at $18.2 billion by Forbes magazine, could reignite talks between Evraz and Anglo-Dutch steelmaker Corus.
Evraz and Corus held informal talks this year about a possible partnership. A person familiar with both companies said: "Abramovich would not be taking a big stake in Evraz if he did not want to do some kind of deal later on."
He also said Corus was "desperate to participate in a steel merger since it knows it is not big enough by itself".
Corus said it did not want to comment. A senior investor familiar with the deal said Mr Abramovich's acquisition would be a precursor for the formation of a Russian national steel champion and could lead to a merger between Evraz and one of the two other large steel companies in Russia - Magnitogorsk or Novolipetsk.
Observers said that having allowed Mr Mordashov to sell Severstal to Arcelor, the Kremlin would want to counter-balance that deal with the formation of a powerful national holding.
The consolidation is also likely to involve Alisher Usmanov, the Russian metals magnate who controls two of the country's largest iron-ore mines. Mr Usmanov said yesterday he had held discussions with Mr Abramovich and would welcome any configuration that would bring value to his company.
Mr Abramovich drove consolidation in the aluminium industry helping to form Rusal, Russia's largest aluminium company. He sold his 50 per cent stake in Rusal to his business partner Oleg Deripaska for about $3 billion.
