Severstal North America said March 2 it sold three mills to The Renco Group Inc. for a deal valued at $1.2 billion.
Renco will take over Severstal's Warren, Ohio, Wheeling, W.Va., and Sparrows Point, Md., mills. The transaction is expected to close this month.
Severstal wants to refocus its North American operations on the company's more modern and efficient Columbus, Miss., and Dearborn, Mich., facilities, said company spokesperson Katya Pruett.
"The sale of these assets will enable Severstal North America to evolve into a stronger and more focused organization that is better able to serve our North American customers," Sergei Kuznetsov, CEO of Severstal International, said in a prepared statement.
Severstal announced on Feb. 21 it will invest approximately $465 million at the Columbus and Dearborn facilities. The company will construct a second electric-arc furnace and additional hot-dip galvanizing line at the Columbus facility, along with a continuous caster, tunnel furnace and pickle line. The Dearborn mill will receive a new cold-rolling complex and hot-dip galvanizing line.
Under the agreement with Renco, Severstal will receive $125 million in cash, a $100 million secured note and the repayment of $317 million of third-party debt at closing. Renco will also assume various Severstal financial liabilities including employee-related and environmental liabilities totaling $650 million.
