YOUNGSTOWN, Ohio -- Russia’s OAO Severstal, the former owner of steel mills in Warren, Maryland and West Virginia, is selling its two remaining steel plants in the United States for $2.3 billion.
In separate transactions, Severstal Dearborn LLC will be sold for $700 million in cash to AK Steel Corp., based in West Chester, and Severstal Columbus (Mississippi) will be sold to Steel Dynamics, based in Fort Wayne, Ind., for $1.625 billion.
The Dearborn, Mich., plant’s blast furnace, rebuilt in 2007, is among the most efficient and productive blast furnaces in the world for its size, according to AK Steel. Two years ago Severstal spent $1.4 billion to modernize the plant and to install a pickle line. It employs 1,400 and is capable of producing $2.5 million tons of finished steel per year.
Severstal Columbus is “one of the newest and most technologically advanced mini-mills in North America,” says Steel Dynamics. It has an annual hot roll production capacity of 3.4 million tons and 645 employees.
OAO Severstal is owned by Russian billionaire Alexey Mordashov, who said in this morning’s announcement that the sale “unlocks substantial value to Severstal’s shareholders.”
Although the sale comes amid increasingly strained relations between Russia and the United States, Severstal noted it “completes a review of strategic options and work to prepare and sign the agreements to sell the assets launched in the end of 2013.”
In 2011, Severstal sold its Warren steel mill to RG Steel, a company formed by billionaire investor Ira Rennert, and its steelmaking operations in Sparrows Point, Md., and Wheeling, W.Va. The combined price of that transaction was $1.2 billion.
RG Steel subsequently went bankrupt; its assets in Warren were purchased by a Pennsylvania scrap company that is demolishing the steel plant.
Pictured: Rolled steel after being treated at Severstal Dearborn.
Published by The Business Journal, Youngstown, Ohio.
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