US Companies Buying US Plants from Russian Steelmaker Severstal

Severstal announced on Monday the sale of its North American plants to U.S. companies for a total of $2.3 billion.

Severstal is selling Severstal Columbus (Mississippi) to Steel Dynamics and Severstal Dearborn (Michigan) to AK Steel Corp., the company said.

AK Steel said separately that its acquisition was worth $700 million.

The sale would be completed “by year-end 2014,” Severstal’s said.

“The work to prepare and sign the agreements to sell the assets was launched in the end of 2013 and has now been successfully finalized,” it said.

Severstal specializes in steel for the auto sector and household goods and is controlled by billionaire Alexei Mordashov.

The company had explained its disposal of foreign assets as a cost-cutting move, but the final sale also comes amid the worsening standoff over Ukraine between Moscow and Washington, which last week introduced its toughest round of sanctions yet against Russian companies.

Kommersant daily said on Monday that Severstal was particularly at risk of being hit eventually by sanctions because Mordashov iwas also a stakeholder in Bank Rossiya, a Russian bank put on the Treasury’s blacklist in March.

Last week Severstal also announced that it was selling its U.S. coal producer PBS Coal to Canadian Corsa Coal Corp. for $140 million by the end of August.

Copyright Agence France-Presse, 2014

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