UPDATE 2-Uralchem buys 20 pct stake in Russia's Uralkali

Mon Dec 2, 2013 11:25am EST

* Uralkali stake worth around $2.9 bln

* Shares up 2.5 pct

* Follows sale of Kerimov's 21.75 pct stake (Releads, adds analyst quotes, share reaction)

MOSCOW, Dec 2 (Reuters) - Belarus-born billionaire Dmitry Mazepin will buy a 20 percent stake in top world potash producer Uralkali through his fertiliser firm Uralchem, in the latest move by Russia to mollify Belarus after the collapse of a sales alliance.

The deal, worth about $2.9 billion based on Uralkali's closing share price on Friday, is the second ownership rejig at the Russian potash producer since it quit the joint venture with Belarus, which sparked fury in the ex-Soviet neighbour and hit global potash prices.

"Mazepin is from Belarus and he has good connections there, so it's probably in the interest of safe-guarding the relationship with Belarus that he was given the chance to buy the stake. There was no shortage of rumored buyers," said Bruce Bower, a partner at Moscow hedge fund Verno Capital.

Shares in Uralkali outperformed the broader market to rise 2.5 percent by 1620 GMT after Uralchem, in which Russia-based Mazepin owns a 95.2 percent stake, announced the acquisition.

Last month, Russian tycoon-turned-politician Mikhail Prokhorov bought a 21.75 percent stake in Uralkali from businessman Suleiman Kerimov, and sources familiar with the matter said the move was done to ease tensions with Minsk.

"By having a fairly well connected Russian (Prokhorov) and Mazepin, it heals the relationship between Russia and Belarus on a political level," Bower said.

Uralchem said on Monday the purchase was a strategic investment. It did not disclose the value of the deal.

"We believe in the fundamental attractiveness of the potash market and appreciate the leadership position held by Uralkali," Mazepin said in the statement.

The deal, which Uralchem said would be completed soon, involves the acquisition of Uralkali stakes belonging to businessmen Filaret Galchev and Anatoly Skurov, who own 7 percent and 4.8 percent, respectively.

Uralchem did not say from where it would get the other 8 percent to reach a 20 percent stake.

Uralkali, which holds around 12 percent of its own shares, acknowledged Uralchem's statement but said it was not party to share sale and purchase arrangements.

The change in shareholders does not necessarily mean the miner will return to a sales agreement with Belarus, said sector analyst Boris Krasnojenov, of Renaissance Capital in Moscow.

"One scenario is that the cartel structure is broken and potash prices are going to remain under pressure and the most efficient producers, like Uralkali, are going to be used at 100 percent capacity," Krasnojenov said.

Another possibility is for Uralkali to reach an agreement with North American potash trading consortium Canpotex or another large producer, he added.

Also on Monday, fertiliser maker Acron said it had cut its stake in Uralkali to 1.77 percent from 2.88 percent, raising 5.5 billion roubles ($166 million). (Reporting by Alessandra Prentice; Editing by Megan Davies and Mark Potter)

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