Alrosa Expects Kristall Merger in September

RAPAPORT... Alrosa's supervisory board is set to vote on the acquisitionof diamond manufacturer Kristall, which will enable the miner to focus onincreasing sales in the US and China, it said Tuesday. The deal, which will go up for consideration on September24, will cost Alrosa RUB 1.89 billion ($29.3 million), and will increase thecompany's share of the Russian polished-diamond market from 20% to 70%, theminer said. "On the back of the increasingly complex economicenvironment, Kristall has been going through some financial challenges in recentyears," said Alrosa CEO Sergey Ivanov. "However, the business maintains itsoutput volumes being Russia's largest producer and exporter of polisheddiamonds, boasting rich heritage, state-of-the-art equipment, and extensiveexpertise in rough-diamonds cutting." The Russia-based miner has been considering the merger sinceApril 2018, but first needed to gain approval from the Russian government. In December, Alrosahired Maxim Shkadov, Kristall's director general, to work on an integrationstrategy for the two companies. The company plans to use itslarger polished-diamond division to target new buyers. "We are quite optimistic about the integration prospects andhave already embarked on preparatory work to start joint operations in cuttingand sales," Ivanov explained. "We will focus our efforts on developing newsales channels, including those in the US and Chinese markets." Alrosa expects the sale and purchase agreement to be signedby the end of the month, and the plan for integrating Kristall to be finalizedby the end of the year, pending approval, it said. Image: Polished diamonds. (Alrosa)