Russian potash producer Uralkali is acquiring Silvinit for $7.8bn in cash and shares to benefit from the rising demand of the commodity.
Under the transaction, Uralkali will acquire 1.56 million ordinary shares of Silvinit for $894.5 a share, representing a total cash consideration of $ 1.4bn.
Uralkali will also implement a statutory merger with Silvinit to buy the rest for new shares of Silvinit worth $6.4bn by issuing its ordinary shares.
According to the company, Silvinit will cease to exist following the proposed merger and Uralkali will be the surviving entity.
The market cap of the combined entity was $23.9bn, based on the closing prices of the ordinary shares of the firms on 17 December 2010.