The Hindu : Business : Severstal buys U.S. steel mill

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Severstal buys U.S. steel mill

The deal with Arcelor Mittal is valued at $810 m

MOSCOW: Russian steel company OAO Severstal on Friday said it would buy the Sparrows Point steel mill in the U.S. from ArcelorMittal for $810 million (euro521 million) in cash.

Sparrows Point is a fully integrated mill in Baltimore, Maryland.

The purchase will make Severstal the No. 4 steel producer in the U.S.. Its North American division also includes a mill and other facilities in the Detroit area and in Columbus, Mississippi.

Sparrows Point has a capacity of 3.6 million tonnes (3.9 million tonnes) 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, the world’s largest steelmaker, was formed by a merger of Mittal Steel Co. NV, of the Netherlands, and Arcelor SA of Luxembourg. The merger 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 per cent. — AP

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