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Alrosa Expects Kristall Merger in September
Sep 18, 2019 5:09 AM
By Rapaport News
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RAPAPORT... Alrosa’s supervisory board is set to vote on the acquisition
of diamond manufacturer Kristall, which will enable the miner to focus on
increasing sales in the US and China, it said Tuesday.
The deal, which will go up for consideration on September
24, will cost Alrosa RUB 1.89 billion ($29.3 million), and will increase the
company’s share of the Russian polished-diamond market from 20% to 70%, the
miner said.
“On the back of the increasingly complex economic
environment, Kristall has been going through some financial challenges in recent
years,” said Alrosa CEO Sergey Ivanov. “However, the business maintains its
output volumes being Russia’s largest producer and exporter of polished
diamonds, boasting rich heritage, state-of-the-art equipment, and extensive
expertise in rough-diamonds cutting.”
The Russia-based miner has been considering the merger since
April 2018, but first needed to gain approval from the Russian government. In December, Alrosa
hired Maxim Shkadov, Kristall’s director general, to work on an integration
strategy for the two companies. The company plans to use its
larger polished-diamond division to target new buyers.
“We are quite optimistic about the integration prospects and
have already embarked on preparatory work to start joint operations in cutting
and sales,” Ivanov explained. “We will focus our efforts on developing new
sales channels, including those in the US and Chinese markets.”
Alrosa expects the sale and purchase agreement to be signed
by the end of the month, and the plan for integrating Kristall to be finalized
by the end of the year, pending approval, it said.
Image: Polished diamonds. (Alrosa)
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Tags:
Alrosa, Kristall, Maxim Shkadov, polished-diamond market, Rapaport News, Sergey Ivanov
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