Indian firm looks to grow its business with lucrative Canadian steel operation.
Essar Steel Holdings Ltd. is acquiring Canada-based Algoma Steel Inc. for around $1.85 billion. Essar Steel is a subsidiary of Essar Global Ltd.
Algoma, based in Sault St. Marie, Ontario, has annual steel shipments of 2.4 million metric tons last year. The company manufactures both hot and cold rolled steel and plate.
Benjamin Duster, chairman of Algoma’s board of directors said, "The board of directors unanimously supports the Essar proposal as it reflects a significant premium to the historical share price of Algoma. This transaction will also benefit Algoma’s employees and the City of Sault Ste. Marie as it will result in new ownership that is committed to investment in Algoma’s facilities to support growth and business sustainability."
Essar Global is an international conglomerate operating in six business areas – steel, oil & gas, power, communications, shipping & logistics and construction.
Essar Steel Holdings Ltd., along with its subsidiaries, operates an integrated steel plant of 4.6 million metric tons per year in India, which is expected to be increased to an 8.5 million metric tons per year steel complex for flat products by 2009. The complex also comprises a cold rolling plant, down stream facilities and a 5 meter wide plate mill. It is India’s largest exporter of flat steel.
The company also operates a cold rolling complex in Indonesia, and has finalized plans to setup an integrated steel plant for flat products in Trinidad and Tobago and a hot strip mill in Vietnam.