Aquisition of Sparrows Point

8 May 2008 07:25

OAO Severstal08 May 2008 FOR IMMEDIATE RELEASE Severstal completes aquisition of Sparrows Point MOSCOW, Russia - May 8, 2008: OAO Severstal (LSE: SVST; RTS: CHMF), one of theworld's leading metals and mining companies, today completed its previouslyannounced acquisition of Sparrows Point, a fully-integrated steel mill based inBaltimore, Maryland, United States, from ArcelorMittal. Severstal has receivedregulatory approval from the United States Department of Justice and theCommittee on Foreign Investment in the United States. Sparrows Point has a capacity of 3.6 million metric tons of crude steel andshipped 2.3 million metric tons of finished steel products in 2007; it is theonly integrated producer of flat rolled steel on the U.S. East Coast and is amajor North American supplier of tin mill products. The acquisition is expected to be accretive in year-one based on currentprojections of costs and prices and offers significant value creation potential.Additionally, Severstal expects substantial synergies with its current U.S.operations in Dearborn, Michigan and Columbus, Mississippi. Merrill Lynch & Co. acted as financial advisor and Skadden, Arps, Slate, Meagher& Flom LLP acted as legal counsel to Severstal. About SeverStal: OAO SeverStal is an international metals and mining company with a listing onthe Russian Trading System and the London Stock Exchange. Incorporated in 1993,the company focuses on high value added and unique niche products and has asuccessful track record of acquiring and integrating high-quality assets inNorth America and Europe. SeverStal owns mining assets in Russia, thus securingits supplies of raw materials. In 2007, Severstal produced 17.5 million tons ofsteel. Revenues were $15.2 billion and EBITDA was $3.7 billion. EPS was $1.92. Forward Looking Statements: This press release may contain projections and other forward-looking statementsregarding future events or the future financial performance of OAO Severstal(Severstal). Forward looking statements are identified by terms such as"expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may"or "might", the negative of such terms, or other similar expressions. Severstalwishes to caution you that these statements are only predictions and that actualevents or results may differ materially. Severstal does not intend to updatethese statements to reflect events and circumstances occurring after the datehereof or to reflect the occurrence of unanticipated events. Factors that couldcause the actual results to differ materially from those contained inprojections or forward-looking statements of Severstal may include, amongothers, general economic conditions in the markets in which Severstal operates,the competitive environment in, and risks associated with operating in, suchmarkets, market change in the steel and mining industries, as well as many otherrisks affecting Severstal and its operations. For further information: SeverStal Dmitry Druzhinin, Investor RelationsOlga Antonova, Public Relations+7 495 540 7766 Taylor Rafferty Michael Henson+1 212 889 4350 (o)+1 917 902 0767 (m) John Dudzinsky+1 212 889 4350 (o)+1 646 715 2980 (m) This information is provided by RNS The company news service from the London Stock Exchange