Translated material
Evraz was allowed into America
US approves deal to buy Oregon Steel Mills
The US Foreign Investment Commission approved the purchase by the Russian Evraz Group of 100% of the shares of the metallurgical company Oregon Steel Mills (the transaction is carried out through a 100% subsidiary of Evraz, Oscar Acquisition Merger Sub Inc), the Russian company said in a statement. Then Evraz plans to incorporate Oregon Steel into its structure under the name Evraz North America. The transaction amount will be $2.3 billion (or $63.25 per share), of which $500 million will be Evraz’s own funds, and $1.8 billion will be raised in the form of a syndicated loan organized by Credit Suisse and UBS.Evraz put forward a purchase offer at the end of November last year. The offer expired on December 28, but was extended first to January 9, then to January 12. The company expects that the permission received from American authorities will speed up the procedure for Oregon Steel Mills shareholders to sell their shares. After all, as analysts explain, not all shareholders are ready to sell them without formal approval of the transaction by the authorities. As of January 9, the Evraz subsidiary managed to consolidate 36.6% of the shares of the American company.
When the impending deal was announced, experts said that Oregon was a rather expensive acquisition for Evraz. By the way, this is the first major purchase of the company after the arrival of new shareholders last summer - the Millhouse company of Roman Abramovich and his associates. However, experts also noted the obvious benefits of this deal. The American company produces high-value products with high added value, and Evraz will have the opportunity to process its own slabs and a ready-made market at these facilities. Experts predict a slight decline in the crude steel market this year, while good conditions remain in the market for high-value products, so the acquisition of Evraz should quickly pay off, although the price for Oregon was almost a quarter higher than the current market value of its shares on the eve of the offer.
Oregon Steel produces about 2 million tons of special steel products, including large and small diameter welded pipes and profile pipes. In addition, the company's facilities in the United States and Canada produce steel rails, rods, fittings and seamless pipe products. In essence, these are products for the oil and gas sector, which are acquiring almost strategic importance in the United States given the recently rapidly developing oil and gas transport links between America and Canada.