The Russian steel and iron ore producer Evraz Group (Evraz) has announced the acquisition of majority stakes in a number of Ukrainian production assets.
In particular, Evraz has acquired a 99.25 percent stake in the Sukhaya Balka iron ore mining and processing complex, which has an annual production capacity of 3.75 million metric tons of iron ore.
In addition, the Russian metallurgical company has acquired a 95.57 percent stake in Dnepropetrovsk Iron and Steel Works, which has a total production capacity of 1.8 million metric tons of pig iron and 1.32 million metric tons of crude steel. It has also purchases majority stakes in three coking plants - a 93.74 percent stake in Bagleykoks, a 98.65 percent stake in Dneprkoks and a 93.83 percent stake in Dneprodzerzhinsk Coke Chemical Plant. These three plants have a combined annual production capacity of 3.52 million metric tons of metallurgical coke. In 2006, these three coking plants shared about 12 percent of overall metallurgical coke production in Ukraine.
All these companies were previously owned by the Ukrainian investment company Privat Group (Privat) via its subsidiaries.
The final terms of agreement and the structure of the deal will be voted by Evraz's BoD. Once approved by the BoD, the deal will not be subject to any approval, including regulatory, and is expected to be closed in the first quarter of 2008.
Commenting on the acquisitions, Evraz's chairman and CEO Alexander Frolov said,"We view this transaction as yet another important step in the realization of our strategies. The acquisition will allow us to increase iron ore self-sufficiency and ensure further upstream integration. It will also create captive intra-group coke-making demand for the excess production of the company's coal mines in Siberia. This deal also represents another step in Evraz's geographical diversification into one of the lowest cost steel producing regions."