Norilsk’s golden opportunity
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Norilsk’s golden opportunity

Norilsk Nickel's Gold Fields deal is the largest single Russian cross-border merger and the second-biggest single foreign investment in South Africa. It needed a record-breaking unsecured Russian loan.

Anglo American had been looking to sell its 20% stake in South African gold company Gold Fields of South Africa, the fourth-biggest in the world, for some time.

Anglo American?s desire to cash in on its stake was strengthened by the $1.4 billion acquisition of Ghana?s Ashanti Goldfields by Anglo Gold, Anglo American?s South African gold subsidiary. Anglo Gold is to pay for the company with its own shares, which would dilute Anglo American?s stake in its subsidiary to around 45%. Anglo American wanted to liquify its minority Gold Fields stake to regain a majority stake in Anglo Gold.

Anglo American?s adviser, Citigroup, prepared a strategy to sell the stake on the equity markets, using two block sales. But it had also told Russian metals company Norilsk Nickel that Anglo American was looking to sell its stake in Gold Fields, and suggested that Norilsk might be interested in buying it.

Jay Collins, head of investment banking for CEEMEA at Citigroup, says he told Norilsk: ?We have another alternative, so you would have to move fast.? He adds: ?The big surprise is how fast Norilsk responded.? On Tuesday March 24, a senior representative at Norilsk called Collins and said his board was interested.

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