The US-based flat steel producer Esmark Incorporated has announced that it has entered into a definitive merger agreement with Russian steelmaker Severstal, thus choosing the Russian steel giant over the Indian steelmaker Essar Steel.
Under the terms of the merger agreement, Severstal is to increase its tender offer to $19.25 per Esmark share, while Esmark's BoD will recommend its shareholders to tender their shares to Severstal.
In addition to the revision of its offer, Severstal has also entered into an agreement to purchase Esmark's aggregate $110 million term loan facilities from Essar Steel.
The total value of the transaction, including Esmark's debt, represents approximately $1.25 billion.
The offer and related transactions are subject to the satisfaction of customary closing conditions.
The agreement comes a few days after Esmark's rejection of Severstal's offer of $17 per share, preferring Essar's $19 per share offer.