The Russian steelmaker Severstal has announced the completion of the acquisition of the US-based flat steel producer Esmark Incorporated (Esmark).
The acquisition was completed pursuant to the merger of Severstal's subsidiary Severstal Wheeling Acquisition Corp. with Esmark. Thus, Esmark has now become a wholly-owned subsidiary of Severstal and has been renamed Severstal Wheeling Holding Company.
The offering period for Severstal's tender offer for all outstanding shares in Esmark expired on August 4, with about 38.77 million Esmark shares being tendered in the offer and not withdrawn, representing approximately 94.17 percent of outstanding shares of Esmark's common stock.
Severstal had raised its bid from the initial $17 per share to $19.25, acquiring Esmark for a total cost of approximately $775 million and receiving all Esmark's assets, including Wheeling-Pittsburgh Steel Corporation, to be renamed Severstal Wheeling Inc., Esmark Steel Services Group Inc., to be renamed Northern Steel Group Inc., and 50 percent in West Virginia-based joint venture Mountain State Carbon.
The acquisition is expected to be accretive in 2009 based on current projections of costs and prices.
Commenting on the acquisition, Severstal International CEO Gregory Mason stated, "The acquisition of Esmark represents a significant step in Severstal's North American growth strategy. We are now poised to be a leading producer and supplier of domestically produced steel to a region that has a consistent demand for high quality products."