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Mechel Buys Two Romanian Steel Plants
The Russian Mechel group, which already has two steel plants in Romania, is now buying the Ductil Steel Buzau and Otelu Rosu plants in that country through its subsidiary Mechel International Holdings AG. The deal will be worth $221 million (€142 million). The seller is Lakewind Ltd. Mechel bought COST (now Mechel Targoviste) and Industria Sarmei (now Mechel Campia Turzii) in 2002 and 2003. Those companies occupy half of the Romanian fittings market.
Mechel filed an application to buy the plants with Romanian antimonopoly agencies in November of last year. Analysts say that the Russian company overpaid for the plants, giving at least twice what the plants are worth. Mechel stock rose on the New York Stock Exchange by 0.89 percent yesterday. Analysts also observe that Romania's membership in the European Union is a benefit for the Russian plant owner by allowing it to avoid duties on exports to Europe.
Mechel is likely to begin buying electricity assets in Romania. The company could supply an electric plant in Romania with its own coal through its own port of Temryuk-Sotra on the Sea of Azov. If coal prices, now at record highs, fall to previous positions, however, the need for such an integrated would be less pressing.
www.kommersant.com
All the Article in Russian as of Apr. 09, 2008
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