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NLMK Completes Purchase of 50% Interest in Steel Invest and Finance

07/08/2011 - NLMK has completed its deal to purchase the remaining 50% interest in Steel Invest and Finance from Duferco Group, making SIF a 100% owned indirect subsidiary of NLMK.

NLMK has completed its deal to purchase the remaining 50% interest in Steel Invest and Finance (SIF) from Duferco Group. As a result of the transaction, SIF will become a 100% owned indirect subsidiary of NLMK. 
 
Cash consideration for the transaction is c.$600m, which NLMK will pay in four equal annual installments. The company plans to finance the transaction out of existing funds.
 
NLMK has consolidated the newly acquired Steel Invest and Finance rolling assets on its balance sheet from July 1, 2011. Certain non-core assets, including long products operations with 0.3 million tonnes/year capacity and Belgian steelmaking operations with 3 million tonnes/year capacity, have been transferred to Duferco Group as part of the transaction.
 
The EU regulatory authorities have already granted clearance to the acquisition.
 
 NLMK is one of the world’s leading producers of steel with 2010 revenue of $8.4 billion and the EBITDA margin of 28%. NLMK production facilities located in Russia, the EU and U.S. employ around 60,000 people.
 
The company produces a wide range of steel products, including hot-rolled, thick hot-rolled plates, cold-rolled, pre-painted, electrical steel (transformer grain-oriented steel and dynamo steel), and other high value added grades, as well as a wide range of long products, including rebar, wire-rod and metalware. In 2010 the company produced 11.5 million tonnes of steel and delivered its products to customers from over 70 countries.
 
Steel Invest and Finance SA (SIF) comprises rolling assets located in Europe and the U.S. with a total capacity of over 5.5 million tonnes/year. European facilities with a capacity of around 2.6 million tonnes/year produce a variety of flat products, including hot-rolled, cold-rolled, galvanized and pre-painted steel. European assets also include facilities for the manufacture of thick plates, with a capacity of around 1.35 million tonnes/year. SIF’s US-based flat steel production facilities have a total capacity of 1.8 million tonnes/year, including 0.8 million tonnes/year of galvanized steel. Around 75% of SIF’s products are sold to the machine-building sector. In 2010 Steel Invest and Finance SA produced 3.2 million tonnes of flat steel.