Steelmaker Esmark Agrees to Buyout

Russian metals and mining company OAO Severstal announced it has an agreement to buy West Virginia-based Esmark Inc. for $19.25 per share. Including the assumption of debt and loans, that puts the value of the deal at $1.25 billion.

Esmark has been at the center of a bidding war between Severstal and India’s Essar Steel Holdings. While management had previously labeled Essar’s offer superior, the United Steelworkers union was backing a buyout by Severstal.

Esmark issued a statement urging investors to tender their shares to Severstal by midnight July 18. The company’s shares closed at $20.47, up 44 cents or 2.2 percent.

“This is an historic day for Esmark, its dedicated employees, the USW and the Ohio Valley,” said Esmark Chairman and CEO James Bouchard.

Both Essar and Severstal had argued they were best-positioned to create value for Esmark shareholders and secure a stable future for the mills. Esmark has operations in 20 states, including subsidiary Wheeling-Pitt plants in West Virginia, Ohio and Pennsylvania and a plant in Greensville County, Va.

COMPILED FROM STAFF, WIRE REPORTS

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