Russia's Acron, Norway's Yara end dispute
Nov. 25, 2011
Russian fertiliser maker Acron said it reached a settlement with Norway's Yara, bringing an end to a lengthy dispute over ownership of a joint venture that held a minority stake in a Smolensk fertilizer plant and other assets.
Under the complex deal announced on Monday, Russian phosphate fertiliser producer Phosagro is acquiring a 51 percent stake in the Nordic Rus venture.
Acron and Yara took the case to Stockholm arbiters after they were unable to agree on how to break up the Nordic Rus joint venture, in which an Acron subsidiary held a majority stake, Renaissance Capital analyst Mikhail Safin said.
"Both sides are satisfied that, after several years of arbitration proceedings, we have managed to achieve the necessary level of mutual understanding to find a compromise and settle the Nordic Rus Holding dispute," Acron Chairman Alexander Popov said in a statement on Monday.
Under the terms of the agreement, Acron's Granit subsidiary will exchange its 51 percent stake in the Nordic Rus holding it operates with Yara for 3.7 percent of its own shares. As a result, Granit will raise its stake in its Acron parent company to 12.4 percent.
In a separate press release, Phosagro said it had obtained the 51 percent Nordic Rus stake.
Yara will own the remaining 49 percent stake of the venture after the deal closes.
"As a result of the settlement between Acron and Yara International, 51 percent of Nordic Rus Holding is now owned by Phosint Limited, which is affiliated with Phosagro Group," it said in a statement. Phosagro did not disclose any financial details related to the transaction.
Acron's Granit will also raise its stake in a separate entity, Dorogobuzh, to 24.3 percent from 12.5 percent as part of the deal. Dorogobuzh is one of Acron's production facilities in Russia's Smolensk region.
Renaissance Capital analyst Mikhail Safin said the 3.7 percent Acron stake Granit acquired is worth about $78 million.
He also said that thanks to the acquisition of the Dorogobuzh stake, Acron will be able to consolidate the company on its books.
"Yara will receive cash," he said, adding that the amount was unclear.
Phosagro also said it was examining the possible acquisition of the remaining stake in Nordic Rus.
Nordic Rus Holding was founded in 1997 by Acron and Norsk Hydro, with the Norwegian firm holding a 49 percent stake.
Norsk Hydro then spun off its fertiliser operations to form Yara in 2004.
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