Abramovich acts as white knight with £1.2bn plunge into Russian miner row

Roman Abramovich, the billionaire owner of Chelsea football club, is seeking to end a four-year power struggle between two fellow Russian resources heavyweights after agreeing to buy a $2bn (£1.2bn) stake in their company Norilsk Nickel.

Mr Abramovich is buying 7.3 per cent of the world's largest nickel and palladium miner, in which he is expected to play the role of a "white knight", acting as a buffer between the Russian tycoons Vladimir Potanin and Oleg Deripaska, who each control about a quarter of Norilsk Nickel.

Mr Potanin and Mr Deripaska have been in dispute since the latter's Hong Kong-listed Rusal, the world's biggest aluminium firm, bought its stake in Norilsk Nickel for $14bn in 2008, just before the global crash which has hurt Rusal and Norilsk Nickel.

To make matters worse, Mr Deripaska has felt he never had much of a say in the running of Norilsk Nickel and that Mr Potanin has repeatedly overruled him. Under yesterday's deal, Mr Abramovich's Millhouse Capital investment vehicle will get three seats on the 13-member board of Norilsk Nickel's directors as well as the largest voting stake in the $30bn company.

"The reasons for and benefits of entering into the agreement are to improve the existing corporate governance and transparency of the Norilsk Nickel group, to maximise profitability and shareholders' value and to settle the disagreements of the company and Interros [Mr Potanin's investment vehicle]," a Rusal spokesman said.

The Russian president Vladimir Putin has said he wanted an end to the feud between two of Russia's richest men and analysts said this deal appears to bear the stamp of the Kremlin.

Messrs Abramovich, Deripaska and Potanin will also contribute equal stakes, amounting to 22 per cent of Norilsk, to an escrow account that will be voted by Millhouse, giving Mr Abramovich the largest say in how the company is run and establishing him as its enforcer.

"Millhouse will control the compliance with the partnership agreement while voting with this block of shares," said Mr Potanin and Mr Abramovich in a joint statement.

Sergey Donskoy, a mining and metals analyst at Société Générale, said: "It's all about whether this shareholder agreement will translate into more effective management. If it does, that could help lead to a substantial re-rating."

The deal prompted the Mr Deripaska and Mr Potanin camps to suspend legal action against each other. A London arbitration court had been due to open hearings into a case dating back to 2010 in which Mr Deripaska accused Mr Potanin's Interros vehicle of reneging on a deal to run Norilsk in the interests of all shareholders.