Russia's Evraz to buy Oregon Steel for $2.3B

Russian steelmaker Evraz Group announced this week that it will purchase US steelmaker Oregon Steel Mills for US$2.3 billion. This will be the largest ever takeover by a Russian company in North America. According to a joint statement released by both companies, the merger will create the largest maker of steel rail producer in the world, and the world's tenth-largest steel company. In Evraz' press statement released Monday, company chairman Alexander Frolov wrote that through the acquisition of Oregon Steel, Evraz will secure access to the expanding pipe business in North America. He added that Evraz' long-term goal is for Oregon Steel to move towards the production of higher-value finished products like pipe and railway tracks, with slabs supplied by Evraz. The transaction is expected to take place the week of November 27, 2006. Upon completion of the transaction, Oregon Steel will become a subsidiary of Evraz. Oregon Steel mills currently has three production facilities in Portland Oregon which make plates, large diameter welded pipe and structural welded pipe. The company also has one large diameter pipe mill in Camrose, Alberta, and Rocky Mountain Steel, a major rail/wire rod and bar mill in Pueblo, Colorado. Oregon Steel's rated capacities for each product are as follows: 1.2 million net tons for plates; 540,000 net tons for large diameter welded pipe; 150,000 net tons for structural tubing; 450,000 net tons for rails; and 500,000 net tons for wire rods / bars.