Russia’s Evraz, TMK agree $4 bln IPSCO buy from SSAB

Deals

Russian steel makers Evraz Group and TMK agreed on Friday to pay a combined $4.025 billion to acquire IPSCO’s North American plate and pipe businesses from Swedish steel firm SSAB.

Evraz, part-owned by billionaire Roman Abramovich, said it would pay $2.3 billion for IPSCO’s Canadian assets. It will also acquire the firm’s US pipe operations before selling them on to TMK, Russia’s largest steel pipe maker, for $1.7 billion. Evraz said in a statement it had entered a back-to-back agreement to sell certain US businesses to TMK and affiliates for $1.2 billion. It said it would transfer the remaining US operations for $500 million in 2009. Evraz said it would finance the acquisition by raising a bridge loan as well as a non-recourse term loan arranged at the acquired company level. “This transaction will further enhance Evraz’s existing North American presence in high value-added steel segments,” said Evraz Chairman and CEO Alexander Frolov.

Evraz has made two previous acquisitions in the United States in the last 18 months. Its $2.3 billion purchase of Oregon Steel Mills created the world’s largest rail producer and in December it agreed to pay $564.8 million for Delaware-based steel plate producer Claymont Steel Holdings. “This deal will increase our exposure to the attractive energy and infrastructure sectors throughout the region. We expect substantial synergies from the combination of IPSCO Canada and Evraz’s existing North American operations,” Frolov said.

Evraz’s London-traded stock was up 2.8% at 1020 GMT and TMK shares rose 2.6%. Shares in SSAB rose 6.2%. A sector analyst in Sweden said the price was in line with speculation about such an acquisition, but looked high in relation to profitability in the steel pipe sector as a whole. “ (SSAB’s) debt is going to come down, and that reduces one area of uncertainty related to the company,” a second Swedish analyst said. (Reuters)

ADVERTISEMENT

European e-commerce soars during pandemic - study Analysis

European e-commerce soars during pandemic - study

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.