Severstal in talks to buy Mittal Steel unit in US
25 November 2006
Mumbai: Russian steel maker Severstal is in negotiations to buy Weirton Steel Corporation, a US unit of Mittal Steel, the world's largest steel maker, Russian newspaper reports said. (See: Severstal talks to Mittal Steel for acquiring its US plant)
Following Mittal's acquisition of Arcelor, US regulators have demanded that it must sell its Canadian plant Dofosco as per US anti monopoly rules.
However, since the Dutch foundation holding the shares of Dofasco refused a request to allow the sale of the Canadian unit to Germany's ThyssenKrupp, Mittal Steel might be required to sell Weirton Steel in place of Canadian steel unit.
US regulators have said Arcelor Mittal would have to sell either Weirton Steel, a West Virginia-based producer, or its Sparrows Point plant in Maryland in place of the blocked sale of Dofasco.
Weirton Steel is the eighth-largest steel maker in the US and the country's second-largest producer of tin-plated steel products.
Severstal, Russia's largest steel maker in terms of its global assets already has a presence in North America after its purchase of Rouge Steel. Severstal, aiming to become the world's second-largest steel maker, raised just over $1 billion placing shares in London last month, plans to acquire more assets, its billionaire owner Alexei Mordashov said. Other Russian firms are also supporting Severstal's acquisition bids.
Newspaper reports also said Severstal and Metalloinvest, a rival steel firm owned by billionaire Alisher Usmanov, were discussing a merger and possible bid for United States Steel Corp.
Russin steel producers are also on the lookout for acquisitions overseas. While Russia's top steel maker by domestic sales, Evraz Group, announced a $2.3-billion acquisition of Oregon Steel Mills, another Russian steel maker, NLMK, is planning a joint venture with trader-producer Duferco to acquire assets in Europe and the US.