Evraz Acquiring IPSCO Operations

Evraz, based in Russia, announced plans to acquire IPSCO. The move is part of the company’s strategy to strengthen its platform for downstream markets for steel plate and tube steel in North America.

IPSCO Canada has three plants in Alberta -- Regina, Calgary and Red Deer.

Alexander Frolov, Evraz’s chairman and CEO, said, "Following the successful acquisition of Oregon Steel Mills, this transaction will further enhance Evraz’s existing North American presence in high value-added steel segments. This deal will increase our exposure to the attractive energy and infrastructure sectors throughout the region. We expect substantial synergies from the combination of IPSCO Canada and Evraz’s existing North American operations. We are delighted to acquire a company with the long history and outstanding track-record of IPSCO Canada and look forward to welcoming IPSCO Canada’s employees to the Evraz family of companies."

Under the structure of the agreed transaction, Evraz will acquire the IPSCO Tubulars business from SSAB for $4.025 billion. SSAB acquired IPSCO last July.

Evraz has also entered into definitive back-to-back agreements with OAO TMK and its affiliates, a Russian-based tubular player, to sell certain of the acquired U.S. businesses for $1.2 billion. In addition, Evraz expects to sell the remaining acquired U.S. businesses of IPSCO Tubulars to TMK for about $0.5 billion in 2009.

The agreement between SSAB and Evraz involves the sale of 12 tubular locations, including, the Regina and Koppel steel mills, that directly supply the tubular operations, the Regina coil processing facility, and related scrap facilities.

SSAB will retain the majority of the steel production capacity, including steel mills in Mobile, Ala., and Montpelier, Iowa, together with four cut-to-length facilities.