Russian Company to buy WCI
posted at 2:15 p.m.Staff reports
POSTED: May 16, 2008
MOSCOW -- OAO Severstal, a metal and mining company, today announced that it has reached a deal to purchase Warren's WCI Steel.
According to the terms of the agreement, Severstal will acquire all outstanding equity of WCI for $140 million in U.S. dollars.
According to a press release, WCI's Board of Directors has recommended the transaction to its shareholders who have consented to the transaction. The acquisition has the full support of the United Steel Workers, the release said.
WCI's total annual steel-making capacity of 1.22 million metric tons is focused on high-quality, custom flat-rolled steel. Together with Severstalás current U.S. operations in Dearborn, Michigan, Columbus, Mississippi, and the recently acquired Sparrows Point in Baltimore, Md., WCI will grow the Companyás North American leadership in the high-quality flat-rolled steel segment for the automotive, appliance, furniture, construction and energy markets.
Gregory Mason, C.E.O. of Severstal International and C.O.O. of OAO Severstal, said, "This acquisition is aligned with Severstalás disciplined approach to growing our U.S. business while creating shareholder value. It solidifies our position as the fourth largest steel producer in the U.S. by raising Severstalás total U.S. capacity to just under 11 million metric tons per year. The addition of WCI to Severstal's family will enhance our custom product capabilities and create opportunities to increase profitability in both the short- and long-term."
The acquisition will become final subject to customary closing conditions.
OAO Severstal is an international metals and mining company with a listing on the Russian Trading System and the London Stock Exchange. Incorporated in 1993, the company focuses on niche products and has a track record of acquiring and integrating high-quality assets in North America and Europe.
Severstal owns mining assets in Russia, thus securing its supplies of raw materials. In 2007, Severstal produced 17.5 million tons of steel. Revenues were $15.2 billion.
