Russian potash fertilizer producer OAO Uralkali (URKA.RS) Monday proposed a merger with rival potash giant OAO Silvinit (SILV.RS).

Uralkali seeks to buy a 20% stake in Silvinit for $1.4 billion and purchase the remainder of the company with an additional share issue, Uralkali said in a statement.

In total, Uralkali proposes buying 1.565 million Silvinit shares at $894.50 apiece. In addition, Silvinit shareholders besides Uralkali will receive 133.4 Uralkali shares for each Silvinit ordinary share and 51.8 Uralkali shares for each preferred share of Silvinit.

The Uralkali board Monday called for a shareholder meeting for Feb. 4 to consider the merger. Uralkali Chief Executive Pavel Grachev said in a statement he recommends voting for the merger.

-By William Mauldin, Dow Jones Newswires; +7 495 232-9192; william.mauldin@dowjones.com