A source close to the deal told Reuters on Wednesday: "The new company will be the world's number one aluminium producer with output of four million tonnes per year, and also the top alumina producer with output of 11 million tonnes."

Completion of the takeover would crown RUSAL's 38-year-old owner, Oleg Deripaska, as Russia's undisputed aluminium king.

Well connected

Deripaska is Russia's sixth-richest man with a fortune estimated at $9 billion by Forbes magazine and is related by marriage to Boris Yeltsin, the former president of Russia.

He met Vladimir Putin, the Russian president, for talks this month and is likely to have received Putin's blessing for the aluminium deal.
   
The new company would be listed on the London Stock Exchange within three years under a non-binding agreement which was signed by the three parties last Friday, a source close to the deal indicated.
 

"Russian strategic sectors, represented by mammoth companies that are leaders in their industries, are asserting themselves on the world stage. This shouldn't be surprising, given Russia's great wealth and natural resources"

Bob Foresman, deputy chairman of Renaissance Capital

Banking sources told Reuters that UBS and JP Morgan were advising on the deal. Both investment banks declined to comment.
 
Rising power-house

Bob Foresman, deputy chairman of the Russian investment bank Renaissance Capital and a seasoned investment banker on the Russian scene, said: "If it materialises, the RUSAL-SUAL deal would be another sign of Russia Inc. expanding in the world.
 
"Russian strategic sectors, represented by mammoth companies that are leaders in their industries, are asserting themselves on the world stage. This shouldn't be surprising, given Russia's great wealth and natural resources."

Under the deal, RUSAL would own 64.5 per cent of the new firm, SUAL 21.5 per cent and Glencore 14 per cent.