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SDI to get processor stake in Severstal NA deal

Keywords: Tags  Severstal, Severstal North America, Steel Dynamics, SDI, AK Steel, Mississippi Steel Processing, M&A, mergers and acquisitions Columbus

CHICAGO — Steel Dynamics Inc. (SDI) will garner about a 20-percent stake in Mississippi Steel Processing LLC as part of its $1.6-billion deal for OAO Severstal’s Columbus, Miss., mill, according to a purchase agreement filed with the U.S. Securities and Exchange Commission (SEC).

The Columbus flat-rolled toll processor adjacent to the mill was set up to serve SDI’s needs.

The agreement also indemnifies SDI from liabilities resulting from a recent settlement between several Severstal subsidiaries and groups involved in the former RG Steel venture. AK Steel Corp.’s purchase agreement for Severstal’s Dearborn, Mich., integrated plant, also filed with the SEC, contains a similar clause.

The purchase agreements confirm that SDI’s buy of Columbus is contingent on AK closing its $700-million deal for Dearborn. The Fort Wayne, Ind.-based steelmaker has said the condition came at the request of Cherepovets, Russia-based Severstal (, July 21).

The steelmakers also may opt to terminate the transactions if the deals are not closed by April 18, 2015, according to copies of the purchase agreements executed July 18. The transactions also are subject to customary closing conditions, including an antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Some analysts have said that the AK Steel deal poses risks in the form of potential antitrust concerns and financing issues (, July 22).

Severstal’s sale of its North American assets to SDI and West Chester, Ohio-based AK Steel will mark the Russian steelmaker’s exit from the U.S. market a decade after establishing itself as an important domestic player. The deals are expected to close by the end of 2014 (, July 21).

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    Jul 25, 2014

    Is an On Campus Piglet by nature a Bear or a Bull, .....? A Beast or a Burden...... is down streaming forward seeing or daydreaming.....? Either way, 2 great Companies and our best to ALL. SDI now is a Dawg , land of real Football.

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