One of Ukraine’s largest business groups is set to control up to a fifth of the global ferroalloy market with an acquisition down under
One of Ukraine’s largest and most aggressive business groups is set to control up to a fifth of the global ferroalloy market with its acquisition of a leading Australian mining company.
On Dec. 4, Ukrainian billionaire Genadiy Bogolyubov of the Dnipropetrovsk-based Privat Group upped the price his company initially offered for the Consolidated Minerals (ConsMin) ore supplier from $736 million in August to nearly $1 billion four months later.
The takeover is expected to be completed later this month. Early this week, a competing bidder, UK-based Pallinghurst, dropped out of the bidding war, offering to sell its shares.
Since its original offer, Bogolyubov’s Belize-based Palmary Enterprises managed to secure the support of its bidding rivals and ConsMin’s board of directors for the West Perth-based mining holding, which supplies manganese, nickel and chromite ores to international markets and holds stakes in copper, zinc and iron ore operations.
ConsMin produced nearly 1 million tons of manganese last year. The chemical element is used for hardening steel and making it stainless.
Shareholders have until Dec. 20 to decide on the offer. Palmary is already ConsMin’s largest shareholder with a stake of 14 percent. ConsMin’s board has recommended shareholders accept the offer.
ConsMin is listed on the Australian Stock Exchange and the London Stock Exchange’s secondary AIM market.
Bogolyubov told the London-based Financial Times that ConsMin would be the first publicly traded asset in his mining and ferroalloy empire, which he would use as a “consolidation center” for ore mining and ferroalloy assets that he controls with partners across the globe.
“Once the acquisition goes through, the Privat group will become a global ferroalloy powerhouse,” said Ivan Kharchuk of Kyiv-based investment bank Dragon Capital.
“Privat currently boasts strong bargaining power in the CIS and Europe. The takeover of Australia’s Consolidated Minerals will open up Asian markets for the group, in particular China.”
Bogolyubov together with his Privat-cohort Igor Kolomoisky – each estimated to be worth more than $3 billion – control three ferroalloy and two manganese plants in Ukraine, according to Dragon.
Privat reportedly owns interest in a US-based alloys factory that is a major ConsMin customer, as well as Russia’s Alapayevskiy metallurgical factory, Romania’s Tulcha (Feral) factory, the Zestafonskiy ferroalloy plant in Georgia and this Caucasus country’s largest producer of manganese, Chiaturmarganets. FT reported that Privat also controls an ore-mining company in the African country of Ghana.
In addition to owning Ukraine’s largest privately owned bank, Privatbank, Kolomoisky and Bogolyubov also control a broad portfolio of assets in metallurgy, telecommunications, media and oil production.
