Russias Severstal on track with Lucchini purchase
Russias fourth largest steel producer, Severstal Group, finally found a way to overcome European Union (EU) steel quotas. With its acquisition of a 62% stake in Italys Lucchini Steel, a major player in Europes rolled steel market, Severstal completed the largest asset purchase by a Russian company in the EU. Despite Severstals $600 million offer for Lucchini, which is on the verge of bankruptcy, the Russian group endured lengthy negotiations before finally hammering out an agreement with the Italian company. Lucchini mainly specializes in producing steel rails for the transportation sector, as well as steel products for rolling stock. The Italian company also has ties in France, UK and other EU countries. Severstal is expected to diversify the portfolio of Lucchini by adding the Russian companys sheet steel products. Furthermore, Severstals raw material facilities will provide the requisite raw materials.