The Russian steel producer Severstal announced on May 30 the commencement of the cash tender to acquire all outstanding shares in US-based flats producer Esmark Incorporated (Esmark). The price of the offer is $17 per common share of Esmark.
The tender offer is scheduled to expire at 12 midnight, Eastern Daylight Time, on June 26, 2008, unless extended.
Severstal's offer is subject to several conditions, among which is the termination of the previously concluded memorandum of agreement between Esmark and Indian steelmaker Essar, and, if entered into prior to the expiration of Severstal's offer, the agreement and plan for merger between Esmark and Essar.
Following the completion of the tender offer, Severstal is expected to commence the second-step merger whereby all remaining Esmark shareholders will receive the same cash price per share as paid in the tender.
In the event of the successful completion of the second-step merger, Severstal will acquire all of Esmark's businesses, including Wheeling-Pittsburgh Steel Corporation, Esmark Steel Services Group and the remaining 50 percent stake in the West Virginia-based Mountain State Carbone joint venture.
The acquisition of Esmark will allow Severstal to strengthen its position in the North American steel market, while becoming one of the region's largest steel producers.