Severstal Buys U.S. Steel Mill
Resource from: CBCC Likes:2952
Mar 25,2008
Purchase of the Baltimore mill will make Severstal the fourth largest steel producer in the U.S.
MOSCOW - Russian steel company OAO Severstal said Friday it will buy Baltimore's Sparrows Point steel mill from ArcelorMittal for $810 million in cash.
Sparrows Point is a fully integrated mill.
The purchase will make Severstal the fourth largest steel producer in the U.S. Its North American division also includes a mill and other facilities in the Detroit area and in Columbus, Ohio.
Sparrows Point has a capacity of 3.9 million tons of crude steel. It is the only integrated producer of flat rolled steel on the U.S. East Coast.
Severstal and the United Steel Workers union have agreed to enter into a collective-bargaining agreement, the company said.
ArcelorMittal, based in Luxembourg, agreed in February 2007 to sell Sparrows Point to resolve U.S. Justice Department antitrust concerns about production of tin-plated steel. ArcelorMittal (MT), the world's largest steelmaker, was formed by a combination of Mittal Steel Co. NV, of the Netherlands, and Arcelor SA of Luxembourg. The buyout was completed in November.
"With Sparrows Point, Severstal brings into its U.S. portfolio an asset with significant existing value as well as unlocked growth potential," CEO Alexei Modashov said in a statement.
Severstal reported this week that net profit for last year rose 33% from the year before as the company benefited from a strong European market, but said its North America results for the year were hit by weaker market conditions in the region and a planned outage related to the rebuilding of a blast furnace.
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