Severstal Sells Dearborn, Columbus Plants
AK Steel and Steel Dynamics, Inc. are buying the units for a combined total of $2.3 billion, the companies announced July 21.
OAO Severstal, a Russian steel company, has agreed to sell its North American operations to two U.S. steelmakers. The Dearborn, Mich. plant is being purchased for $700 million in cash by West Chester, Ohio-based AK Steel, and Fort Wayne, Ind.-based Steel Dynamics, Inc. is buying the Columbus mini-mill in northeastern Mississippi for $1.625 billion in cash, the companies announced July 21.
Describing the 1,000,000-square-foot Columbus plant, which was commissioned in August 2007, as one of the newest, most technologically advanced mini-mills in North America, Steel Dynamics reported that the purchase will boost its annual steel shipping capacity by about 40 percent, to 11 million tons. "The acquisition of Columbus represents a significant step in the continuation of our growth strategy," CEO Mark Millett said. "It leverages our core strengths and at the same time fulfills our initiatives to further increase value-added product and market diversification. We enthusiastically look forward to welcoming the Columbus employees and customers into the Steel Dynamics family and working with them to drive future growth and success." The plant has an estimated annual hot roll production capacity of 3.4 million tons and 645 employees, according to a Steel Dynamics news release.
Last month, Madhu Ranade, vice president and general manager of Severstal Columbus, accepted an Award for Steel Excellence from the American Metal Market in New York City. The award, which recognizes the accomplishments, innovation, and excellence in the metal industry, was given to Severstal Columbus in the Best Operational Improvement category.
Dearborn has been Severstal North America's headquarters. This plant was part of Henry Ford's River Rouge automobile complex; it employs approximately 1,400 people and can produce approximately 2.5 million tons of finished steel per year for the automotive, construction, and appliance markets, according to AK Steel's news release, which said the plant completed a large-scale modernization campaign in 2011 and its blast furnace was rebuilt in 2007. "The acquisition of Severstal Dearborn allows us to grow our business profitability and better serve our customers," said James L. Wainscott, AK Steel's chairman, president, and CEO. "It furthers our automotive strategy and strengthens our carbon steelmaking footprint. It also combines great employees at Dearborn with great employees at AK Steel to strengthen a terrific company that is better able to compete, and to win, in the global steel marketplace. We welcome the employees of Dearborn to AK Steel."
A Severstal release said the transaction is expected to close by the end of 2014.