The Russian steel producer Novolipetsk Steel (NLMK) has announced that the company has entered into a definitive agreement to acquire the US-based flat producer Beta Steel from the group of private investors for a total consideration of $400 million.
Beta Steel operates an EAF shop with an annual production capacity of 725,000 mt and hot rolled strip mill of 1.1 million mt of annual capacity.
The acquisition of Beta Steel will allow NLMK to secure an addition upstream integration of the facility with pipe producing John Maneely Company (JMC), which NLMK agreed to buy in August 2008. Moreover, since Beta Steel is one of the suppliers of HRC to JMC, the company would provide an additional support to JMC's future growth with increasing supplies to JMC's Atlas division.
NLMK is planning to increase JMC's HRC output through debottlenecking existing operations as well as supplying its own slabs for re-rolling.
The acquisition of Beta Steel is subject to customary regulatory approvals and is expected to be completed in the fourth quarter of 2008.