Severstal Offers $1.24Bln for Esmark

Severstal said Tuesday that it had offered $1.24 billion in cash for all the outstanding shares in U.S. steel producer and distributor Esmark.

The company said it had made an offer to buy Esmark for $17 per share after U.S. trade union United Steelworkers rejected a proposed acquisition of Esmark by India's Essar Group.

Severstal said its own proposal had been supported by the union. "Severstal has developed a highly credible restructuring plan designed to derive maximum value from Esmark, including a five-year capital improvement plan that carries the full support of [the union]," the company said in a statement.

Merrill Lynch and Citigroup are acting as financial advisers on the deal.

Esmark had planned to accept a $670 million buyout offer from Essar, but United Steelworkers demanded that the firm reject the merger as it would violate the union's contract with Esmark.