Russia's NLMK to buy US Beta Steel for $400 million
Novolipetsk Steel, the Russian steel maker owned by billionaire Vladimir Lisin, has agreed to acquire US hot-rolled steel producer Beta Steel in a $400 million cash deal to expand its presence in North America.
Novolipetsk, Russia's fourth-largest steel maker by volume, said on Thursday it had signed a definitive agreement to buy the Portage, Indiana-based company from a group of private shareholders. The deal is expected to close in the fourth quarter of 2008.
“This acquisition is fully in line with our commitment to develop a strong footprint in the US high value-added finished steel market,” Novolipetsk President and Chief Executive Alexei Lapshin said in a statement.
Steel makers in Russia, the world's fourth-largest producer, have acquired around 10% of US steel-making capacity in the last few years as they spend billions of dollars from record profits betting on steel demand in North America.
Novolipetsk, or NLMK, agreed this month to buy US steel pipe maker John Maneely Co for $3.5 billion. The company said the Beta Steel purchase would secure supplies of hot-rolled steel for John Maneely's pipe mills.
Over 35% of Beta Steel's output is currently sold to pipe and tube producers, including John Maneely's Atlas division.
NLMK said it planned to increase hot-rolled coil output at Beta Steel by tackling bottlenecks in its existing operations and supplying its own slabs for re-rolling.
Beta Steel operates an electric arc furnace with annual capacity of 800,000 short tons, or 725,000 metric tons, plus a hot-rolling mill with annual capacity of 1.2 million short tons, or 1.1 million metric tons.
The company sold 602,000 short tons (547,000 metric tons) last year, raising revenues of $324 million and earnings before interest, taxation, depreciation and amortization (EBITDA) of $21 million. (Reuters)
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