MMK to buy out Turkish JV MMK-Atakas for US$485 million

Friday, 11 March 2011 15:33:48 (GMT+3)   |  

Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) has announced that it has signed an agreement with Turkey's Atakas Group of Companies (Atakas) to purchase its stake in the MMK-Atakas steelmaking joint venture (JV) set up by the two sides in Istanbul and Iskenderun, Turkey.

In a statement dated March 11, MMK announced the signing of a share purchase agreement to acquire 50 percent minus one share of the JV from Atakas for a price of US$485 million, to consolidate 100 percent shares in MMK-Atakas. The transaction is expected to be completed by November 1, 2011, subject to obtaining necessary permissions and approvals.

Commenting on the development, MMK's chairman Victor Rashnikov said, "Consolidation of 100 percent control in MMK-Atakas by MMK is part of the MMK strategy aimed at establishing MMK's presence in the key and rapidly growing markets in Russia and the Middle East, primarily in Turkey. Consolidation will ensure more efficient management of the company and help capitalize on the promising Turkish market of flat rolled products."

$2.1 billion investment

As SteelOrbis previously reported, on March 9 MMK-Atakas commissioned the new electric arc furnace (EAF) facility at its industrial complex in Iskenderun, completing its plant in Iskenderun.

MMK-Atakas, with two sites - one located in Iskenderun and one in Istanbul, has a 2.5 million mt annual crude steel production capacity, a 2.3 million mt capacity of hot rolled flat steel per year, a 1.2 million mt pickling capacity, a one million mt cold rolling capacity, a 900,000 mt galvanizing capacity and a 400,000 mt capacity for color coating.

The total investments in the MMK-Atakas project, considered to the biggest private sector steel investment in Turkey, are valued at approximately $2.1 billion. The construction of the MMK-Atakas joint venture project began in March 2008, with the key equipment supplier for the project being the Italian plantmaker Danieli.

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