The Russian steelmaker Severstal has announced that it has reached an agreement to purchase US-based flat steel producer Sparrows Point from the world's largest steelmaker ArcelorMittal.
Severstal agreed to acquire Sparrows Point for a consideration of $810 million paid in cash.
The transaction reflects a significant strategic opportunity to Severstal to strengthen its position in the US steel market. In addition, the acquisition of Sparrows Point will help Severstal to improve its distribution channels and increase its geographic reach as the plant provides direct ocean access and is located in close proximity to a number of major US railways and highways.
Following the completion of the transaction, which is expected in the second quarter of 2008 and is subject to customary closing conditions, Severstal plans to implement a five year long investment program at Sparrows Point.