Arcelor to merge with Severstal

Luxembourg-based steelmaker Arcelor and Russia's largest steel company Severstal announced today that they agreed to merge, creating the world's largest steelmaker and most profitable steel company. According to the deal, Severstal will hold 32 percent of the enlarged Arcelor, while the remaining 68 percent stake will be held by Arcelor's existing shareholders. Arcelor said the deal values it at Euro 44 per share, representing a premium over the Mittal Steel offer. Severstal Chairman Alexei Mordashov will also pay Arcelor Euro 1.25 billion ($1.6 billion) in cash. The combined group will have Euro 46 billion of annual sales and Euro 9 billion of EBITDA, with 70 million metric tons of steel production per annum.