A potential merger of Russia's two largest steelmakers, OAO Severstal (CHMF.RS) and Evraz PLC (EVR.LN) is seen as negative by the country's anti-trust watchdog, one of the regulator's top officials told Dow Jones Newswires Tuesday.

The comment comes a day after the Financial Times quoted Evraz Chairman Alexander Abramov as saying in an interview that the companies' merger would be a "good idea."

A Severstal spokesman declined to comment. An Evraz spokeswoman couldn't immediately comment.

The merger would lead to a reduction in competition in the rolled steel markets, head of the Federal Anti-Monopoly Service department of industry and defense Maxim Ovchinnikov said in an emailed answer to the Dow Jones Newswires' questions.

The regulator would approve the merger only if the deal led to the "stimulation of technological and economic progress, or increased the competitiveness of Russian-made products on the global market," among other conditions, Ovchinnikov said.

-By Nadia Popova, Dow Jones Newswires; +7 495 232-9198, nadia.popova@dowjones.com