Arcelor headquarters in Luxembourg in 2006
Photo: Reuters
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U.S. Approves Severstal Purchase in MD
The U.S. Justice Department has approved the sale of the American Sparrows Point steel mill by ArcelorMittal to Severstal, the AP reports. In February 2007, the Justice Department order Luxembourg-registered ArcelorMittal to sell Sparrows Point due to monopoly charges on the market for thin-gauge steel. On March 21 of this year, Severstal reported that it was acquiring Sparrows Point from ArcelorMittal for $810 million in cash. The deal is to be sealed by in the second quarter of the year.
Sparrows Point has a production capacity of 3.6 million tons of steel annually. The company delivered 2.3 million tons of finished steel last year. The new acquisition opens up new vistas for expansion for Severstal in the United States. The company is expected to cooperate with other Severstal facilities in Dearborn, Michigan, and Columbus, Mississippi. In addition, the acquisition of Sparrows Point will make direct oceanic shipment of its products possible and provide quick access to a number of major U.S. railroad and automotive arteries. Sparrows Point is located near Baltimore, Maryland.
Severstal is a vertically integrated steel producer. The company's production facilities are located in Russia, Europe and the U.S. It produced 17.5 million tons of steel in 2007. Its net profit according to international accounting standards rose 33.1 percent in 2007 over 2006 to $1.94 billion, receipts were $15.2 billion, up 22.5 percent and its EBITDA was $3.7 billion, up 24.5 percent.
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