OAO Severstal to Buy WCI Steel

The board of directors for WCI Steel Inc., Warren, Ohio, has approved an agreement to sell the company to OAO Severstal for roughly $3.29 per share. WCI currently has more than 42.5 million shares on a fully diluted basis. Severstal will assume more than $230 million of WCI’s debt and other obligations under the terms of the deal.

"During the past few months, the board of directors has carefully evaluated strategic alternatives and has concluded that the sale of WCI Steel to Severstal is in the best interests of the shareholders and will enable the Warren, Ohio, facility to prosper in the future," Leonard M. Anthony, president and chief executive officer of WCI Steel, says. "All of us at WCI Steel are committed to working toward a smooth and rapid transition."

The acquisition is subject to customary closing conditions, including approval under the U.S. anti-trust laws by the U.S. Department of Justice, and is expected to close in the third quarter of 2008. According to a press release issued by WCI Steel, the acquisition has the full support of the United Steel Workers.

WCI Steel is an integrated producer of value-added, custom steel products serving niche markets. The company emphasizes customer and technical service and produces produces 185 grades of flat-rolled custom and commodity steel products at its Warren facility. The company focuses on a wide range of custom flat-rolled steel products, including high-carbon, alloy, ultra-high-strength and heavy-gauge galvanized steel. Its major customers are steel converters, processors, service centers, construction product companies and pipe and tube manufacturers.

OAO Severstal is an international metals and mining company with a listing on the Russian Trading System and the London Stock Exchange. Incorporated in 1993, the company focuses on high-value-added and unique niche products and has a successful track record of acquiring and integrating high-quality assets in North America and Europe. Severstal also owns mining assets in Russia. In 2007, Severstal produced 17.5 million tons of steel, with revenues of $15.2 billion and EBITDA of $3.7 billion.