The Russian steel producer Severstal has announced that it has entered into a binding agreement to acquire the US leading value-added steel products manufacturer WCI Steel.
According to the agreement, Severstal will acquire all outstanding shares of WCI Steel for a total consideration of $140 million in cash, a market equivalent of the mill's value of $331 million based on outstanding net debt as of April 30,2008.
WCI has an annual production capacity of 1.22 million metric tons of high quality, custom flat rolled steel and, together with other Severstal's facilities, WCI will help Severstal North America to establish leadership in the US high-quality flat rolled steel segment for the automotive, appliance, furniture, construction and energy markets.
The acquisition is a subject to receipt of all necessary government and regulatory approvals, and is expected to be completed by early third quarter of 2008.