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Arcelor Mittal to Sell its 25% Interest in Severgal to Severstal
05/29/2007 - Arcelor Mittal and Severstal announced the agreed sale to Severstal of Arcelor’s 25% minority stake in Severgal, their joint venture located at the Severstal Cherepovets site.
Arcelor Mittal and Severstal announced the agreed sale to Severstal of Arcelor’s 25% minority stake in Severgal, their joint venture located at the Severstal Cherepovets site.
Originally set up to serve the CIS automotive market, the Severgal joint venture has the capacity to produce coated products for both the industry and the automotive markets. The hot-dip galvanizing line is currently dedicated primarily to supplying the booming domestic industry market.
Arcelor Mittal will terminate its Extragal® License Agreement with Severgal, and will remain a non-exclusive agent for some Severgal products. In addition, Arcelor Mittal and Severstal have agreed to separately pursue their respective development plans for the automotive market.
Arcelor Mittal is the world's largest steel company, with 320,000 employees in more than 60 countries. The company brings together the world's number one and number two steel companies, Arcelor and Mittal Steel.
The company leads major global markets such as automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African and American countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
Arcelor Mittal’s key pro-forma financials for 2006 show combined revenues of USD 88.6 billion, with a crude steel production of 118 million tonnes, representing around 10% of world steel output.
Incorporated in 1993, SeverStal is an international steel producer focused on high value-added and unique niche products. The company has a successful track record of acquiring and integrating high-quality assets in North America and Europe. SeverStal owns mining assets in Russia, thus securing its supplies of raw materials.
In 2006, SeverStal produced 17.6 million tonnes of steel and had revenues of $12.4 billion, PBT of $1.8 billion, and EPS of $1.27. In April 2007, the company had a market capitalization of $13.6 billion. The majority (82.37%) of the company's stock belongs to Alexei Mordashov, with the remaining 17.63% owned by institutional investors and employees. SeverStal’s supervisory board has 10 members, five of whom are independent non-executives, including the chairman. The company has recently put in place corporate governance systems that match international standards.
