Steel Dynamics Inc., Fort Wayne, Ind., has entered into a definitive agreement to acquire 100% of Severstal Columbus (Mississippi) from OAO Severstal, Russia. Commissioned in 2007, Severstal Columbus is one of the only North American flat roll mills to have 76-in-wide hot roll, 74-in.-wide cold roll, and 72-in.-wide galvanized sheet capabilities. These and other production capabilities will broaden Steel Dynamics’ product portfolio with regard to width, gauge, and strength, and enhance its position as a leading North American steel producer.
The acquisition expands Steel Dynamics’ annual steel shipping capacity to 11.0 million tons, representing an approximate 40% increase. The additional exposure to the high-growth OCTG and automotive segments complements Steel Dynamics’ market offerings.
“The acquisition of Columbus represents a significant step in the continuation of our growth strategy,” stated Chief Executive Officer, Mark Millett. “It leverages our core strengths, and at the same time fulfills our initiatives to further increase value-added product and market diversification.”
The transaction is expected to be immediately accretive to earnings and cash flow per share, and to generate approximately $30 million in pretax earnings synergies per annum.
Severstal Columbus is one of North America’s newest mini-mills with 645 employees and an estimated annual hot-roll production capacity of 3.4 million tons. Columbus produces a broad range of high-quality hot-rolled, cold-rolled, and galvanized sheet products for customers primarily in the distributor, construction, automotive and pipe and tube markets. Columbus is strategically located in Mississippi to serve the high-growth markets in the Southern U.S. and Mexico, providing geographic diversification and growth opportunities for Steel Dynamics.
Steel Dynamics, Inc. is one of the largest domestic steel producers and metals recyclers in the United States based on current estimated annual steelmaking and metals recycling capability, with annual sales of $7.4 billion in 2013, over 6,800 employees, and manufacturing facilities primarily located throughout the United States (including five existing steel mills, six steel processing facilities, two iron production facilities, over 90 metals recycling locations and six steel fabrication plants).
