Feb 13 2007
Novolipetsk Steel (NLMK) and Duferco Group are pleased to announce that Duferco U.S. Investment Corporation and Esmark have formed a consortium to purchase the assets of Winner Steel, based in Pennsylvania, USA. The consortium has entered into a letter of intent with Winner Steel. The transaction remains subject to further negotiation and execution of a definitive asset purchase agreement and other conditions. It is currently expected to be completed in the second quarter of 2007.
Duferco U.S. Investment Corporation is a wholly-owned subsidiary of Steel Invest & Finance S.A. (Luxembourg), a 50/50 joint venture between the Duferco Group and Novolipetsk Steel.
Winner Steel is one of the largest independent galvanized steel producers in the United States. Its operations are located on a single site in Pennsylvania and include three galvanizing lines with combined annual capacity of around 1.2 million tonnes and production in 2006 of around 0.6 million tonnes.
The main applications of the galvanized steel produced by the company are in the construction, appliances and automotive industries. Winner Steel is located close to the Farrell facility, which is already part of the NLMK-Duferco JV, and is one of the primary suppliers of cold-rolled steel to the galvanizing industry, including Winner Steel.
Alexey Lapshin, NLMK President and a board member of Steel Invest and Finance S.A, said:
“We welcome this development in the business of our joint venture with the Duferco Group. It will provide for an increase in value-added products and further expansion into the large North American market. We are delighted to have Esmark, one of the most dynamic companies in the US steel industry, as our partner in this project.”
Benedict Sciortino, Director of the Duferco Group and a board member of Steel Invest and Finance S.A, said:
“Being located just next to our Farrell facility in Sharon, Winner Steel is a logical component of our North American growth strategy. The acquisition is likely to create substantial synergies by ensuring a stable supply of cold-rolled material to Winner Steel and by increasing the downstream exposure of the NLMK-Duferco JV. We are delighted to work together with Esmark on this transaction and are hopeful that it may lead to successful joint projects in the future.”