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Russia's Uralchem Buys Stake in Uralkali
Deal Marks Final Step in Ownership Change for Potash Company

By Lukas I. Alpert
Dec. 2, 2013 9:29 a.m. ET

MOSCOW—The last remaining key partners in potash miner OAO Uralkali agreed to sell their stakes, making the final step in a sweeping ownership change that could end turmoil that rocked the industry.

Russian fertilizer company Uralchem OJSC said Monday that its main shareholder and his partners agreed to buy a 20% stake in Uralkali. The announcement came two weeks after Russian tycoon Mikhail Prokhorov's Onexim Groupagreed to buy a 21.75% stake from Uralkali's primary shareholder, Suleiman Kerimov.

Russian fertilizer firm Uralchem agreed to buy out the last remaining key partners in Uralkali. Above, Uralkali potash. Andrey Rudakov/Bloomberg News

The $22 billion global potash market has been in disarray since Uralkali in July said it would leave a trading partnership with Belarus that controlled around 40% of global trade in the fertilizer ingredient.

The move effectively ended an informal global pricing cartel, sending potash prices tumbling and pushing stock prices for the world's top producers into a tailspin. It also infuriated officials in Belarus—which counts on potash for a large part of its export revenue—with the country's president demanding that Mr. Kerimov and his partners sell their stakes for there to be any possibility of reconciliation.

Uralchem said Monday that it would acquire the 11.8% stake held by Mr. Kerimov's partners, Filaret Galchev and Anatoly Skurov, as well as other shares from smaller partners. The company said it expected the deal to be completed soon.

"The purchase of this package is a strategic investment for us that will create substantial value for the group and its shareholders," said Uralchem Chairman Dmitry Mazepin.

The value of the deal wasn't disclosed. The stakes collectively would be valued at 57.7 billion rubles ($1.75 billion) at Monday's market price in Moscow.

Also Monday, fertilizer company Acron JSC said it had sold a 1.2% stake in Uralkali on the open market for approximately $170 million—slightly above market value.

A spokeswoman for Uralkali declined to comment.

Mr. Kerimov and his partners had been under pressure to sell after Belarusian authorities arrested Uralkali Chief Executive Vladislav Baumgertner in August on charges that he abused his power as head of the trading venture. Uralkali has said the charges were politically motivated.

An employee uses the light from a head torch to illuminate the machine-cut walls of a potash mine operated by Uralkali in Berezniki, Russia.

Belarusian President Alexander Lukashenko had said that a solution could be reached only if Uralkali's principal owners sold their stakes. Days after Mr. Kerimov agreed to sell his stake, Mr. Baumgertner was extradited to Russia to face charges there.

Executives with Uralkali and Belarus's state-owned potash miner have signaled that the trading arrangement could be revived but that it was unlikely that could happen soon.