MOSCOW, Aug 21: Russia's largest and second-largest aluminium producers, Rusal and Sual, plan to merge to create the world's largest producer of primary aluminium, a report said on Monday.

Aluminium baron Oleg Deripaska, the owner of Rusal, will hold a 75-per cent stake in the new firm while Viktor Vekselberg and partners, who control Sual will hold the remaining 25 per cent, the business daily Kommersant said, quoting unnamed sources close to Vekselberg.

Spokesmen for both companies when contacted declined to comment on the report.

A protocol agreement for the merger was signed earlier this month and the transaction is to be announced formally in October, Kommersant said.

The merged group would be the largest producer of primary aluminium in the world with capacity of 3.7 million tons annually, exceeding the US giant Alcoa and the Canadian firm Alcan, the newspaper said.

It would also have a 100 per cent monopoly on the Russian market, but will not encounter problems with competition authorities as such transactions are permitted if “they reinforce the position of Russian producers on the world market,” Kommersant said. —AFP