Uralkali, Silvinit Merger Recommended by ISS

Russian potash miner Uralkali said on Thursday that the ISS proxy advisory service recommended shareholders vote in favor of its planned merger with domestic rival Silvinit.

"This merger is certainly compelling based on the strategic rationale alone," the ISS said in a report sent to Uralkali.

"The two companies are similar in many respects, including in terms of production and strategy. The expected gains from cost savings and scale can be substantial."

The recommendation comes after minority shareholders in Silvinit last month demanded a revision of the merger terms, which they said favored Uralkali as it will receive a larger portion of the combined business.

Fellow listed fertilizer group Acron, which owns 8 percent of Silvinit shares, voted against the deal at a board of directors' meeting and is expected to do so again at the shareholders' vote on February 4.

Both companies are controlled by Russian billionaire tycoon Suleiman Kerimov and associates, who are aiming to consolidate their potash empire into a single Russian champion and the world's second-biggest producer.