Severstal to acquire one more plant in U.S.

Severstal buys the Sparrows Point mill in the U.S. state of Maryland from ArcelorMittal for $810 million.

Photo: Severstal to acquire one more plant in U.S.

Severstal said in a statement the deal would close in the second quarter of 2008. The company was advised on the deal by Merrill Lynch & Co.

"We have serious plans to grow our business in North America and believe in the long-term prospects of the American market," Severstal Chief Executive and main shareholder Alexei Mordashov said.

Severstal, Russia's largest steel maker including foreign assets, already owns plants in Dearborn, Michigan and Columbus, Mississippi.

Sparrows Point has capacity to produce 3.6 million tonnes a year of crude steel. It sold 2.3 million tonnes of finished products last year and is one of the leading U.S. suppliers of tinplate.

ArcelorMittal, the world's largest steel maker, agreed last year to sell Sparrows Point after anti-trust authorities told it to divest the plant as a condition of the merger of Mittal Steel and Arcelor through which the larger company was created.

Severstal is a Russian company mainly operating in the steel and mining industry, centred in the northern city of Cherepovets. Severstal is listed in the RTS and LSE. As such it is the second largest steel company in Russia, behind Evraz Group. As "White Knight" Severstal was to merge with Arcelor, thus preventing a takeover of Arcelor by Mittal, but the Arcelor deal with Severstal was called off following criticism within the Arcelor board. Arcelor finally merged with Mittal Steel on 25 June 2006 to create Arcelor Mittal.