Russia’s OAO SeverStal has reached an agreement to purchase the Sparrows Point facility in Baltimore, Md., from ArcelorMittal for $810 million. Sparrows Point is being sold as required by the U.S. Department of Justice following the merger of Mittal Steel and Arcelor SA in 2006. It was originally slated to be sold to Esmark, but the deal fell through in December 2007. Sparrows Point, which has an annual capacity of 3.6 million metric tons of crude steel, is the only integrated producer of flat rolled steel on the East Coast.
SeverStal expects the transaction to be accretive in one year based on current projections of costs and prices. The company also expects substantial synergies with its current U.S. operations in Dearborn, Mich., and Columbus, Miss. The acquisition is subject to customary closing conditions, including approval by the Department of Justice, and is expected to close in the second quarter of 2008. Meanwhile, the United Steelworkers have approved the acquisition.
SeverStal to Acquire Sparrows Point
March 24, 2008