Rusal to become no. 1 aluminum maker

Rusal director Alexander Bulygin estimated the value of the combined company would be $ 25 billion to $ 30 billion and said it expected annual revenue of $ 10 billion.

Under the terms of the agreement, Bulygin will become the new company's chief executive. The company will have an 11-member board including six representatives of Rusal, two from Sual, one from Glencore and two independent directors. It will have 110,000 employees and will operate in 17 countries around the world.

The company said it hoped to secure regulatory approval from Russian authorities and the European Union by April.

"There are number of challenges that lie ahead. The deal has to be approved by the various regulatory bodies and that always takes a bit of time, there are hurdles that you have to get across," said Sual president Brian Gilbertson, a one-time CEO at mining giant BHP Billington who will be board chairman at the new Rusal.

Russian regulatory approval is expected to be a formality - both Deripaska and Vekselberg have meet with President Vladimir Putin recently and analysts say they have good relationships with the Kremlin.

The jailing of oil tycoon Mikhail Khodorkovsky, who sponsored opposition parties in 2003, and the breakup of his Yukos oil empire have shown the potential consequences for moguls whose politics or business plans run counter to the Kremlin's.