6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
The transaction values Arcelor at EUR23 billion (US$29.4 billion), or 44 euros per share, representing a premium of 100% over Arcelor's closing price on Jan. 26, 2006, the day before Mittal Steel announced a hostile bid for the company, and 36.6% over Arcelor's closing price on May 25, 2006.
Together Arcelor and Severstal will have EUR46 billion in sales (US$58.4 billion) and 70 million tonnes of production, based on each company's pro forma 2005 results.
The combined entity will create a world leader in all product segments including flat carbon steel, long carbon steel and distribution. The combination will strengthen Arcelor's No. 1 global position in the automotive steel segment (with No. 1 positions worldwide with a global market share over 20%, more than double that of its nearest competitor).
The transaction is subject to antitrust approvals, which the parties expect will be obtained shortly. The transaction is expected to close in July 2006, subject to obtaining regulatory approvals.
Arcelor is the No. 1 steel company in the world with a turnover of 32.6 billion euros in 2005. The company holds leadership positions in its main markets: automotive, construction, household appliances and packaging as well as general industry. In 2006, Arcelor employs 110,000 associates in over 60 countries.
Severstal is the largest Russian steel producer, with 2005 annual steel production of 17.1 million tonnes. It is the second largest flat steel producer in Russia with annual steel production of 10.9 million tonnes. In addition, Severstal owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tonnes, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tonnes. Severstal-Resource owns 70 years of iron ore reserves and 84 years of coal reserves. 2005 revenue and EBITDA were approximately EUR1.12 billion and EUR506 million, respectively. Severstal-Resource produces coking coal, thermal coal, iron ore pellets and iron ore concentrate.