Oleg Deripaska's United Company RusAl said Friday it would seek to combine with Norilsk Nickel, the country's biggest mining company, in the next year and may buy shares on the open market.

A merger is "in the interests of all shareholders," RusAl chief executive Alexander Bulygin said in e-mailed answers to questions. "If the combination completes within a year, in 10 years we can become the leader in metals and mining, producing all the metals traded" on the London Metal Exchange, he said.

RusAl on Thursday bought 25 percent of Norilsk from Onexim Group, an investment company controlled by billionaire Mikhail Prokhorov.

Prokhorov's Onexim received 14 percent of RusAl in return for the shares it sold in Norilsk. His investment company also got $7 billion in cash, Kommersant said Friday, citing unidentified bankers familiar with the transaction.

Closely held RusAl may seek to raise its stake in Norilsk by buying shares on the market if conditions are favorable, Bulygin said.

"If not, increasing the stake is not a must," he said. "We will review different ways to merge, discussing it with Norilsk shareholders large and small."

Vladimir Potanin holds about 30 percent of Norilsk and is the company's largest investor. RusAl said it plans to meet with Potanin's Interros to discuss managing Norilsk.

Norilsk rose 74.58 rubles, or 1.1 percent, to 6,651.97 rubles Friday, after falling 3.1 percent Thursday after RusAl announced the stake purchase.

RusAl may be worth $35 billion, Lehman Brothers said in a March report. A combination of RusAl and Norilsk would create a company with a market capitalization of $90.5 billion, potentially rising to $110 billion in a year, Lehman said.

RusAl, formed in March 2007 in a merger between Russian Aluminum, SUAL and the alumina assets of Glencore International, has "unique experience in unifying three companies," Bulygin said. "We are consolidators."

Separately, Norilsk began talks with Metalloinvest on a possible combination. Metalloinvest, controlled by billionaire Alisher Usmanov, is the country's largest iron ore producer.

Bulygin said RusAl would not take an "aggressive" position to block a deal with Metalloinvest. RusAl doesn't want to "spoil relations" with global funds that hold stakes in Norilsk as the aluminum company itself plans to sell shares next year, Bulygin said.

Metalloinvest said Thursday that it would continue to pursue merger talks with Norilsk.

Analysts reacted positively to the deal Friday.

"RusAl wouldn't risk billions of dollars to get into the company and get stuck because of a stubborn shareholder," said Kirill Chuiko, a metals analyst at UralSib. "The deal seems to have been clinched behind the scenes."

In recent years, leading Russian businesses have tended to consult with President Vladimir Putin about major mergers and acquisitions, and Thursday's deal, potentially involving consultations among up to four business groups, appeared to be no exception.

Potanin met with Putin on Thursday to "discuss the realization of Interros' international projects," the Kremlin official web site reported Thursday evening.

"It is hardly a pure coincidence," Chuiko said.

Vladimir Zhukov, senior metals analyst at Lehman Brothers in Moscow, said in a note Friday that Bulygin appeared skeptical about the quality of Metalloinvest assets, and that could indicate that RusAl intended to "at least initially [play] hardball with Norilsk Nickel before a potential acquisition of Metalloinvest" in an attempt to lower the value of Usmanov's firm.

Bloomberg, MT