UPDATE 2-Russia's Evraz takes control of coal miner Raspadskaya

* Evraz buys out management stake in Raspadskaya

* Doubles Raspadskaya stake to 82 percent

* Deal in cash, new shares, warrants worth around $800 mln

* Increases coal self-sufficiency to over 100 percent

* Evraz London shares drop in early trade

(Writes through with details, background, updates shares)

By Polina Devitt and Clara Ferreira-Marques

MOSCOW/LONDON, Oct 4 (Reuters) - Russia's Evraz has agreed to take control of coal miner Raspadskaya in an $800 million deal that will make the steelmaker self-sufficient in coking coal and turn it into Russia's largest producer of the steel ingredient.

Russia's biggest steelmaker already had effective control of the coal miner with a 41 percent stake held through a holding company. Thursday's deal - which will involve buying full control of the holding company, Corber, from Raspadskaya's management - takes its holding to 82 percent.

Raspadskaya's bosses will remain at the helm until at least the end of 2013.

Evraz is part-owned by billionaire Chelsea soccer club owner Roman Abramovich. It had long considered either selling or consolidating its stake in Raspadskaya, which has been rebuilding production after a fatal accident in 2010, one of Russia's worst in recent years.

The company scrapped sale plans last year. Analysts said current market conditions, including weak coal and steel prices, had made a disposal of the stake impossible.

Several analysts questioned the wisdom of Evraz's splashing out on a company it effectively already controls while markets are uncertain. Credit Suisse analysts put the premium to Raspadskaya's current share price at 15 percent, while RMG analysts said that based on the enterprise value of both companies, Evraz would pay a premium of around 20 percent.

But others said low prices for coking coal meant Evraz might have got a bargain.

"Contrary to previous M&A activities we believe Evraz is buying Raspadskaya at the bottom of the market," Citi analysts said in a note. "We note that coking coal prices globally are well below cash costs of marginal producers and the timing of the acquisition coincides with the lowest point in coking coal markets since April 2011."

Evraz shares dropped sharply on the news in early trading, but recovered to trade down just 0.3 percent by 1020 GMT at 246.5 pence, outperforming a 0.6 percent drop in the UK-listed mining sector . Raspadskaya's Moscow-listed shares were down 0.45 percent after rising in early trade.


Evraz did not specify the total price tag for the deal, but said it would pay about $202 million in cash and the rest in new shares and warrants. At current prices, that would amount to just under $800 million.

Evraz said Raspadskaya management would hold just over 11 percent of its shares as a result of the agreement. It will issue 132.7 million new shares, representing 9.9 percent of its share capital, and warrants to subscribe for 33.9 million new shares representing 2.53 percent of its share capital.

The deal will allow Evraz to overtake rival Mechel as Russia's top coking coal producer, but will also boost its reserves.

Total proved and probable coal reserves of Yuzhkuzbassugol, Evraz's existing producer of coking coal, are estimated at approximately 632 million tonnes. Raspadskaya, meanwhile, has proven and probable coal reserves of 1.3 billion tonnes.

The deal is due to complete in the fourth quarter but conditions include receiving regulatory clearance and an unspecified limit on falls in the price of both Evraz and Raspadskaya.

Evraz's shares have fallen 35 percent during the last twelve months, according to Reuters data, valuing it at around $5 billion at the market's close on Wednesday. Raspadskaya's market value was about about $2 billion on Wednesday.

The remaining 18 percent of Raspadskaya's shares will stay listed on the Russian Stock Exchange and Russia's MICEX-RTS.

(Additional reporting by Polina Devitt; Editing by Catherine Evans)

((Polina.Devitt@thomsonreuters.com)(+7 495 775 12 42)(Reuters Messaging: polina.devitt.reuters.com@reuters.net))