Evraz Buys Up Ukraine Steel and Iron Factories

Evraz Group, the country's largest steelmaker by domestic volume, on Tuesday agreed to acquire Ukraine's Dnipropetrovsk Iron and Steel Works plus a separate iron-ore complex and three coking plants.

Evraz said in a statement that it would pay for the assets with a combination of cash and new equity, but did not say how much it would pay.

"The acquisition will allow us to increase iron-ore self-sufficiency and ensure further upstream integration," Evraz chairman and chief executive Alexander Frolov said.

Evraz, part-owned by Chukotka Governor Roman Abramovich's Millhouse holding, will acquire 95.57 percent of the Dnipropetrovsk steel mill, which has capacity to produce 1.8 million tons per year of pig iron and 1.23 million tons per year of crude steel.

The company said it would acquire a 99.25 percent stake in the Sukhaya Balka iron-ore mining and processing complex, which has annual capacity to produce 3.75 million tons of iron ore.

Evraz will also acquire 93.74 percent of the Bagleykoks coking plant, 98.65 percent of Dniprkoks and 93.83 percent of the outstanding shares in Dniprodzerzhinsk Coke Chemical Plant.

Evraz said it expected the deal to be closed in the first quarter of 2008 after an independent valuation of the assets is completed.

Frolov said the coking plants would process some of the excess coking coal produced by Evraz mines in Siberia.