Sunday, May 25, 2008
Severstal announces agreement to acquire WCI Steel
More consolidation in the steel industry
Press & Guide
OAO Severstal, one of the world's leading metals and mining companies, announced May 16 that it has reached a binding agreement to purchase WCI Steel, a market leader in the production of value-added steel products based in Warren, Ohio.
According to the terms of the agreement, Severstal will acquire all outstanding equity of WCI for a total cash consideration of $140 million, implying an enterprise value of $327 million based on outstanding net debt as of April 30.
WCI's board has recommended the transaction to its shareholders. Shareholders representing a majority of WCI's diluted shares outstanding have irrevocably consented to the transaction. The acquisition has the full support of the United Steel Workers (USW).
WCI's total annual steel-making capacity of 1.22 million metric tons is focused on high-quality, custom flat-rolled steel for use in demanding applications. Together with Severstal's current U.S. operations in Dearborn, Columbus, Mississippi and the recently acquired Sparrows Point in Baltimore, Md., WCI will grow Severstal's North American leadership in the high-quality, flat-rolled steel segment for the automotive, appliance, furniture, construction and energy markets.
The complementary nature of WCI's manufacturing facility and product offering to Severstal's existing U.S. assets creates potential synergies that together with strong steel industry fundamentals leave WCI poised to add value across Severstal's U.S. platform.
"This acquisition is aligned with Severstal's disciplined approach to growing our U.S. business while creating shareholder value," said Gregory Mason, CEO of Severstal International and COO of OAO Severstal.
Press & Guide
OAO Severstal, one of the world's leading metals and mining companies, announced May 16 that it has reached a binding agreement to purchase WCI Steel, a market leader in the production of value-added steel products based in Warren, Ohio.
According to the terms of the agreement, Severstal will acquire all outstanding equity of WCI for a total cash consideration of $140 million, implying an enterprise value of $327 million based on outstanding net debt as of April 30.
WCI's board has recommended the transaction to its shareholders. Shareholders representing a majority of WCI's diluted shares outstanding have irrevocably consented to the transaction. The acquisition has the full support of the United Steel Workers (USW).
WCI's total annual steel-making capacity of 1.22 million metric tons is focused on high-quality, custom flat-rolled steel for use in demanding applications. Together with Severstal's current U.S. operations in Dearborn, Columbus, Mississippi and the recently acquired Sparrows Point in Baltimore, Md., WCI will grow Severstal's North American leadership in the high-quality, flat-rolled steel segment for the automotive, appliance, furniture, construction and energy markets.
The complementary nature of WCI's manufacturing facility and product offering to Severstal's existing U.S. assets creates potential synergies that together with strong steel industry fundamentals leave WCI poised to add value across Severstal's U.S. platform.
"This acquisition is aligned with Severstal's disciplined approach to growing our U.S. business while creating shareholder value," said Gregory Mason, CEO of Severstal International and COO of OAO Severstal.
Labels: steel
