Esmark purchase completed, now called Severstal Wheeling Holding Co.

By Lisa Kerner

Charlotte, N.C., Aug. 5 - OAO Severstal completed its acquisition of Esmark Inc. following the completion of Severstal's tender offer for Esmark shares on Aug. 4.

Approximately 94.17% of Esmark's outstanding shares were tendered in the offer, a company news release noted.

Severstal subsidiary Severstal Wheeling Acquisition Corp. was merged with and into Esmark, a Wheeling, W.Va., steel producer.

Esmark, the surviving corporation, is now an indirect, wholly owned Severstal subsidiary operating as Severstal Wheeling Holding Co.

According to Severstal, the acquisition is a significant step in the company's North American growth strategy.

Severstal acquired all of Esmark's businesses, including:

• Wheeling-Pittsburgh Steel Corp. - to be renamed Severstal Wheeling, Inc.;

• Esmark Steel Service Group, Inc. - to be renamed Northern Steel Group, Inc.; and

• Remaining 50% ownership of the joint venture Mountain State Carbon, LLC, a blast furnace coking coal facility in West Virginia.

Severstal noted that the acquisition, with a total equity value of about $775 million, is expected to be accretive in 2009.

"Not only does the addition of Esmark bring considerable stand-alone growth potential while also creating synergies with our existing U.S. plants, it solidifies Severstal's position as one of the leading integrated steel companies in the fast consolidating North American market," Severstal chief executive officer Gregory Mason stated in a company news release.

"We are now poised to be a leading producer and supplier of domestically produced steel to a region that has a consistent demand for high quality products," Mason added.

In June, Esmark agreed to be acquired by Severstal for $19.25 per share, or $1.25 billion, including debt.

Severstal, a Moscow-based metals and mining company, amended its tender offer, increasing its offer price to $19.25 per share from $17.00.

It was previously reported that Severstal also agreed to purchase Esmark's $110 million term loan facilities from Essar Steel Holdings Ltd., a flat carbon steel manufacturer based in Essar, India.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.