Rail freight operator Globaltrans denied Sunday that it was in merger talks with NefteTransService, Interfax reported.
Industry sources said Friday that Globaltrans and NefteTransService were in talks on a merger that would create a business with sales of $2.7 billion and a 10 percent share of the Russian market.
"They started [talks] several months ago and have been unable to agree on pricing terms so far," one source said, while a second source said the talks had become more active lately.
A third said London-listed Globaltrans, which has a strategy to grow both via acquisitions and organically, was likely to acquire NefteTransService, which is controlled by brothers Vyacheslav and Vadim Aminov and company management.
A decade ago, Russian cargo owners relied on state-owned monopoly Russian Railways as the main fleet operator, but now 70-90 percent of the country's freight fleet is privately owned.
According to state-owned Russian Railways, the country's freight railcar fleet totals 1.1 million units. Last year cargo traffic totaled 1.3 billion tons.
Privately owned NefteTransService does not disclose its financial results but a source at the company said that its revenues stood at around $1.3 billion.
That is slightly below the $1.4 billion top line at London-listed Globaltrans, which has a market capitalization of around $2.4 billion.
Globaltrans' earnings edged down last year by 2 percent to $312 million on the back of an increase in financing costs from acquisitions to expand its fleet in an industry opening up to competition.
Material from the Moscow Times was contributed to this report.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.