Russian gas giant OAO Gazprom (GAZP.RS) Monday said it has called off the merger of its electricity assets with the country's biggest coal producer, Siberian Coal Energy Co., or SUEK, confirming a recent media report.
Gazprom has contacted the Federal Antimonopoly to withdraw the application to buy 50% of SUEK that it submitted earlier this year, the companies said in a joint statement.
The companies cited uncertainty about how the capacity and electricity would develop as the reason for calling off the merger, and said they would instead work together on deals in the coal sector.
In February, Gazprom said it would fold part of its electricity assets into SUEK, taking a controlling stake in the company in the process. The plan was to eventually sell the shares in an international initial public offering.
Many analysts had feared that the merger - which would create the country's biggest electricity holding - could hinder the ongoing liberalization of Russia's electricity market.