OAO Severstal (SVST.L) said Monday it reached separate definitive transaction agreements to sell its Severstal Columbus, LLC and Severstal Dearborn, LLC subsidiaries, collectively known as Severstal North America, to Steel Dynamics Inc. (STLD) and AK Steel Corp.(AKS), respectively, for a total cash consideration of $2.325 billion.
The closing of the transaction is not subject to any financing conditions and is expected to be realized by year-end 2014.
In a separate press releases, AK Steel confirmed that it agreed to acquire Severstal North America's integrated steelmaking assets located in Dearborn, Michigan for $700 million in cash. The acquisition also includes a cokemaking facility and interests in three joint ventures that process flat-rolled steel products.
AK Steel expects the transaction to be immediately accretive to its earnings and create significant long-term value for AK Steel, our employees, customers and shareholders.
AK Steel anticipates annual cost-based synergies of approximately $50 million, with approximately $25 million realized in the first full year following the closing of the acquisition.
AK Steel noted that it intends to finance the acquisition with a prudent combination of debt and equity securities and remains committed to enhancing its credit profile. The acquisition is supported by a fully committed bridge financing facility from Credit Suisse.
The transaction is subject to customary closing conditions and regulatory approvals. Subject to the conclusion of the regulatory review, the closing is expected to occur in the fourth quarter of 2014.
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