OREANDA-NEWS. January 17, 2011. Uralkali (RTS, MICEX, LSE (GDRs): URKA) and Silvinit (RTS, MICEX: SILV, RTS: SILVP) announced that ISS Proxy Advisory Services (“ISS”, the leading independent provider of proxy advisory recommendations to institutional investors), has stated its support of the merger between Uralkali and Silvinit, to be voted upon at the respective companies Extraordinary General Meetings, scheduled to be held on 4 February 2011.

In a report ISS said: ”This merger is certainly compelling based on the strategic rationale alone. The two companies are similar in many respects, including in terms of production and strategy. The expected gains from cost savings and scale can be substantial.”  ISS further stated that that there are benefits to Silvinit shareholders becoming part of a larger, more transparent, liquid and shareholder-friendly company and it is beneficial that Silvinit can participate in the expected gains of the merger as holders will receive shares of the new combined company. 

Commenting on the release of the ISS analysis, Pavel Grachev, Chief Executive Officer and member of the Board of Directors of Uralkali, stated:

- We are pleased that one of the largest independent proxy advisory firms has recommended to their clients that they vote for the merger, understanding the benefits of the Combined Group.  We are excited about the creation of a leader in the global potash sector and the opportunities that will arise in this highly dynamic industry for the Combined Group. By combining the assets of two leading regional businesses which have a natural strategic fit, the Uralkali Board believes that the long term benefits for shareholders and customers will be considerable and Uralkali shareholders should vote in favour of the Proposed Combination.

Vladislav Baumgertner, Chief Executive Officer and member of the Board of Directors of Silvinit, had the following to say:

- We appreciate ISS recognizing the strong rationale for the merger of these two complementary businesses, and believe that the combined entity will be positioned as one of the world’s leading potash companies providing a platform for long term growth, which will be beneficial for shareholders, customers, employees and other stakeholders. The Board recommends that Silvinit shareholders vote in favour of the Proposed Merger.

Additionally, Uralkali and Silvinit have launched a website related to the proposed merger.  The website www.urkasilv-merger.com contains detailed information on summary transaction terms, transaction timeline, its rationale and information for both Silvinit and Uralkali shareholders. The contact information for investors, shareholders and journalists is also included. A constantly updated newswire will provide all the latest news about the merger process.

The proposed combination will be effected through the acquisition by Uralkali of approximately 20 per cent of the ordinary shares of Silvinit for USD 894,5 per share, or total cash consideration of USD 1,4 billion, and subsequent implementation of a statutory merger of Uralkali and Silvinit through the conversion of the remaining ordinary and preferred share capital of Silvinit into Uralkali ordinary shares. Uralkali will be the surviving entity following the proposed combination, with its ordinary shares traded on the RTS and MICEX and its GDRs traded on the LSE, and Silvinit will cease to exist.