AK completes purchase of former Severstal Dearborn mill

AK Steel, West Chester, Ohio, has completed the acquisition of Severstal North America’s integrated steelmaking assets in Dearborn, Michigan. The deal includes a cokemaking facility and interests in three joint ventures that process flat-rolled steel products. AK Steel said it paid $707 million in cash for the acquisition. The newly acquired facilities will be referred to as Dearborn Works.

“At AK Steel, the future is now, and the future is bright, as our acquisition of Dearborn Works makes us a larger, stronger and more flexible company,” states James Wainscott chairman, president and CEO of AK Steel. “The acquisition is transformational to AK Steel, and it combines much more than the operational assets of two outstanding companies. It combines great employees who will strengthen a terrific company that is better able to compete, and to win, in the global steel marketplace.”

The newly acquired steel mill produces flat-rolled steels primarily for the automotive, construction and appliance markets. The mill completed a $1.2 billion modernization campaign in 2011. The plant is capable of producing around 2.5 million tons of finished steel per year, pushing AK Steel’s total steel production to 7.5 million tons per year.

AK Steel says the Dearborn Works blast furnace, which was rebuilt in 2007, is among the most efficient and productive blast furnaces in the world for its size. The complex also began operating a new pickling line tandem cold mill and a new hot dip galvanizing line in 2011.

The company also says the acquisition increases AK Steel’s operational and maintenance flexibility and provides a platform for significant cost-based synergies, including purchasing, transportation and overhead cost savings.