Acquisition
March 14 2008 - 3:02AM
UK Regulatory
RNS Number:1049Q
Evraz Group S.A.
14 March 2008
FOR IMMEDIATE RELEASE
Evraz to acquire IPSCO's Canadian plate and pipe business from SSAB
for a net cost of $2.3 billion: acquisition of IPSCO Tubulars business from SSAB
for $4.025 billion and the on-sale of IPSCO's US tubular and seamless business
to TMK for approximately $1.7 billion
March 14, 2008 - Evraz Group S.A.(LSE: EVR) ("Evraz") today announced the
acquisition of IPSCO's Canadian plate and pipe business ("IPSCO Canada") for a
net cost of $2.3 billion. The final value will be subject to certain closing
adjustments.
With plants in Regina, Calgary and Red Deer, IPSCO Canada is a leading North
American producer of steel plate, as well as pipe for the oil and gas industry.
This purchase is yet another step in the implementation of Evraz's strategy to
build a strong platform in the North American downstream markets of steel plate
and tubular products.
Commenting on the transaction, Alexander Frolov, Evraz's Chairman and CEO, said,
"Following the successful acquisition of Oregon Steel Mills, this transaction
will further enhance Evraz's existing North American presence in high
value-added steel segments. This deal will increase our exposure to the
attractive energy and infrastructure sectors throughout the region. We expect
substantial synergies from the combination of IPSCO Canada and Evraz's existing
North American operations. We are delighted to acquire a company with the long
history and outstanding track-record of IPSCO Canada and look forward to
welcoming IPSCO Canada's employees to the Evraz family of companies."
Under the structure of the agreed transaction, Evraz will acquire the IPSCO
Tubulars business from SSAB for $4.025 billion. Evraz has also entered into
definitive back-to-back agreements with OAO TMK and its affiliates ("TMK"),
Russia's leading tubular player, to sell certain of the acquired US businesses
for $1.2 billion. In addition, Evraz expects to sell the remaining acquired US
businesses of IPSCO Tubulars to TMK for approximately $0.5 billion in 2009. All
of these transactions are subject to certain closing adjustments and conditions.
As a result of these transactions, the net cost of the acquisition for Evraz is
expected to be approximately $2.3 billion.
The transaction will be financed by a combination of a bridge loan raised at the
Evraz level, as well as a non-recourse term loan arranged at the acquired
company level.
Credit Suisse Securities (Europe) Limited and Goldman Sachs International are
acting as joint financial advisors to Evraz. Cleary Gottlieb Steen & Hamilton
LLP and Blake, Cassels & Graydon LLP are acting as legal counsel to Evraz.
Forward Looking Statement:
This press release contains forward-looking statements, including statements
regarding the expected benefits of the acquisition, which involve a number of
risks and uncertainties. These statements are based on Evraz's current
expectations and beliefs. Actual results could differ materially from the
results implied by these statements. Factors that may cause or contribute to
such differences include: the risk that the conditions to the transaction will
not be satisfied; changes in both companies' businesses during the period
between now and the closing; developments in obtaining regulatory approvals for
the transaction; the successful integration of IPSCO Canada into Evraz's
businesses subsequent to the closing of the transaction; timely development;
competitive products and pricing, as well as fluctuations in demand; cost and
availability of raw materials; potential equipment malfunction; plant
construction and repair delays; the ability to retain key management and
technical personnel of IPSCO Canada; and adverse reactions to the proposed
transaction by customers, suppliers and strategic partners. Evraz is under no
obligation to (and expressly disclaims any such obligation to) update or alter
their forward-looking statements whether as a result of new information, future
events or otherwise.
Investor Notice:
Credit Suisse Securities (Europe) Limited and Goldman Sachs International, who
are authorised and regulated in the United Kingdom by the Financial Services
Authority, are acting exclusively for Evraz Group S.A. and no one else in
connection with the acquisition of the Business and will not be responsible to
anyone other than Evraz Group S.A. for providing the protections afforded to
clients of Credit Suisse Securities (Europe) Limited and Goldman Sachs
International or for providing advice in relation to the acquisition of the
Business or any other matters referred to in this announcement.
# # #
For further information:
Evraz Group S.A.
Irina Kibina
Vice President
Corporate Affairs and Investor Relations
Tel: +7 495 232 1370
IR@evraz.com
Evraz Group S.A. is one of the largest vertically-integrated steel and mining businesses. In 2007, Evraz Group produced
16.3 million tonnes of crude steel. Evraz Group's principal assets include three of the leading steel plants in
Russia: Nizhny Tagil (NTMK) in the Urals region and West Siberian (Zapsib) and Novokuznetsk (NKMK) in Siberia, as well
as Palini e Bertoli in Italy, Evraz Vitkovice Steel in the Czech Republic, Evraz Oregon Steel Mills and Claymont Steel
in the USA. Its fast-growing mining businesses comprise Evrazruda, the Kachkanarsky (KGOK) and Vysokogorsky (VGOK) iron
ore mining complexes, Yuzhkuzbassugol company and an equity interest in the Raspadskaya coal company. The mining assets
enable Evraz Group to be a vertically-integrated steel producer. Evraz Group also owns and operates the Nakhodka
commercial sea port, in the Far East of Russia. Evraz vanadium operations comprise Strategic Minerals Corporation, USA,
and Highveld Steel and Vanadium Corporation, South Africa. For further information visit www.evraz.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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