Alrosa’s supervisory board is set to vote on the acquisition of diamond manufacturer Kristall, which will enable the miner to focus on increasing sales in the US and China, it said Tuesday.
The deal, which will go up for consideration on September 24, will cost Alrosa RUB 1.89 billion ($29.3 million), and will increase the company’s share of the Russian polished-diamond market from 20% to 70%, the miner said.
“On the back of the increasingly complex economic environment, Kristall has been going through some financial challenges in recent years,” said Alrosa CEO Sergey Ivanov. “However, the business maintains its output volumes being Russia’s largest producer and exporter of polished diamonds, boasting rich heritage, state-of-the-art equipment, and extensive expertise in rough-diamonds cutting.”
The Russia-based miner has been considering the merger since April 2018, but first needed to gain approval from the Russian government. In December, Alrosa hired Maxim Shkadov, Kristall’s director general, to work on an integration strategy for the two companies. The company plans to use its larger polished-diamond division to target new buyers.
“We are quite optimistic about the integration prospects and have already embarked on preparatory work to start joint operations in cutting and sales,” Ivanov explained. “We will focus our efforts on developing new sales channels, including those in the US and Chinese markets.”
Alrosa expects the sale and purchase agreement to be signed by the end of the month, and the plan for integrating Kristall to be finalized by the end of the year, pending approval, it said.
Image: Polished diamonds. (Alrosa)