Oct. 1, 2014
Severstal Completes Sale of Steelmaking Assets
Severstal has completed the sale of its Columbus and Dearborn facilities to Steel Dynamics and AK Steel. The move marks the exit of Russia’s Severstal from North American steel production.
Steel Dynamics, Fort Wayne, Ind., purchased Severstal Columbus, one of the newest steelmaking facilities in North America, for $1.625 billion. The mill is located in Columbus, Miss., near the Alabama border.
"I would like to enthusiastically welcome the Columbus employees, community, and customers into the Steel Dynamics family," says Mark D. Millett, CEO. "The successful completion of the Columbus acquisition is an important milestone for Steel Dynamics and represents a significant step in the continuation of our growth strategy."
The acquisition of Columbus significantly expands and diversifies the company's steel operating base, expanding Steel Dynamics' annual steel shipping capacity to 11.0 million tons, a 40 percent increase. The additional exposure to the high-growth oil country tubular goods and automotive markets complements Steel Dynamics' product offerings. Also, Columbus is well positioned to serve the high-growth markets in the southern U.S. and Mexico, providing geographic diversification and growth opportunities, the company says.
In addition to purchasing the Dearborn steelmaking operations, which will be called Dearborn Works, West Chester, Ohio-based AK Steel acquired Severstal’s cokemaking facility and interest in three joint ventures processing flat-rolled steel products. AK paid $707 million in the deal.
"The acquisition of Dearborn Works is transformational to AK Steel. It makes us a larger, stronger and more flexible company," says James L. Wainscott, chairman, president and CEO of AK Steel.
Dearborn Works, which produces flat-rolled steels primarily for the automotive, construction and appliance markets, completed a large-scale modernization campaign in 2011. During the campaign, more than $1.2 billion was invested in new equipment and various operational improvements. The facility is capable of producing 2.5 million tons annually. With the acquisition, AK Steel’s annual shipments are expected to exceed 7.5 million tons.