Alrosa Board Approves Kristall Takeover

RAPAPORT... Alrosa is set to finalize its acquisition of diamondmanufacturer Kristall in a $29 million deal in October, following approval fromits supervisory board. Alrosa expects the RUB 1.89 billion sale-and-purchaseagreement to be signed by the end of the month, with a concrete plan for themanufacturer's integration into the company to be in place by the end of the year, it noted. Kristall is the leading polished-diamond manufacturer inRussia and Europe, processing more than 200,000 carats of rough annually. WhileAlrosa already runs a manufacturing unit, the acquisition of Kristall is set toexpand its share of the polished-production market from 20% to 70%."Despite the fact that Alrosa is currently a key supplier ofrough diamonds to Kristall, it accounts for as little as 0.5% of Alrosa's salesof rough diamonds," Alexey Philippovskiy, Alrosa's deputy CEO, said Wednesday."The deal value is less than 1% of Alrosa's net assets and, according to ourestimates, the purchase price will not exceed Kristall's net assets at the dateof the transaction." Last year Kristall produced 105,700 carats of polisheddiamonds, with sales of 111,700 carats. It reported revenue of RUB 12.8 billion($199.1 million) and profit of RUB 40.7 million ($633,040). The company alsooperates a jewelry entity and a business that produces tooling and equipmentfor the diamond industry. Image: Polished diamonds. (Alrosa)