Severstal OJSC Sells American Plants

Russian Severstal has signed separate definitive agreements for the sale of its subsidiaries Severstal Columbus and Severstal Dearborn with Steel Dynamics, Inc and AK Steel Corporation for US $ 2,325 million.

Steel Dynamics Inc buys Severstal's Columbus, Michigan mini-mill for $ 1.62 billion in cash, and AK Steel buys assets owned by a Russian steel company in Dearborn, Michigan for $ 700 million in cash ...

AK Steel says the acquisition also includes a coke production center and interests in three joint ventures that specialize in flat products processing. The completion of the transaction is expected to occur in the fourth quarter of 2014. Credit Suisse acts as financial advisor to AK Steel and Weil, Gotshal & Manges LLP acts as legal advisor to the company.

Steel Dynamics said it has signed a definitive agreement to acquire 100 percent of Severstal Columbus. The deal will help the company significantly expand its hot rolled steel operating base to 3.4 million tonnes per year.

Back in May of this year, there was talk of a possible sale of Severstal's North American assets. The company considered various strategic options. At the same time, the CEO and main owner of the company, Alexei Mordashov, said that the sale of the American factories could reduce Severstal's debt and help increase the company's profitability.

In 2003, Severstal acquired the Dearborn plant for $ 285.5 million and subsequently invested another $ 1 billion. And in 2007, Severstal launched its Columbus plant, investing a total of $ 1.5 billion. Plant sales in 2013 reached $ 3.9 billion, which is 30 percent of the company's total sales.