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Gazprom merger to create power giant

Gazprom is to create a Russian electricity giant with 52 GW in capacity by combining its power assets with those of IES Holdings, part of the Renova Group controlled by Viktor Vekselberg.

The merger will create Russia’s largest power company with about a quarter of Russia’s power generating capacity by combining Gazprom’s current 36 GW with Renova’s 16 GW through its stakes in four power plants. The new firm is expected to be worth more than $15bn.

Renova will get a 25 per cent stake in Gazprom Energoholding, which controls Gazprom’s main power assets. Renova will retain a blocking stake so that Gazprom Energoholding board decisions will require Renova’s approval.

The parties said they may sell shares in the merged company through an initial public offering following the merger, which Vekselberg said could take place by year-end.

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