Russia approves BP and TNK merger

Russia's anti-trust ministry has approved the merger of local oil firm TNK with BP. This removes the last obstacle for the two companies to create Russia's third largest oil producer.

In a statement, the ministry said its head Ilya Yuzhanov had approved all merger requests by the two firms. The deal had been previously approved by the European Union and Ukrainian anti-trust bodies, they said it represented no threat to the sector.

BP agreed in February to pay US$6.15bn for a 50% stake in TNK in one of the largest transactions in Russia's corporate history. The combined firm is produce 1.2 million barrels of crude oil per day, mainly in Western Siberia.

Brokerage NIKoil said it believed that consolidation policy was key to the TNK-BP value and added it expected the combined entity to free float some of its shares.

The remaining 50% stake in TNK-BP is controlled by the shareholders of one of Russia's largest banks, Alfa Bank, led by Mikhail Fridman and shareholders of industrial group Access/Renova, led by Viktor Vekselberg.

TNK-BP has six oil producing units, five refineries and 2,100 filling stations, but almost each unit has its minority shareholders.