OAO Severstal is a major Russian steelmaker, owned by billionaire Alexy Mordashov. As tensions grow between the United States and Russia, Severstal has sold their two U.S.-based steel plants. They have sold the plants to Steel Dynamics Inc. and AK Steel Holding Corp. for $2.33 billion. With this sale, Severstal has exited the U.S. market completely.
Thus far, neither Severstal nor Mordashov have been the target of U.S. or European Union sanctions. However, Bank Rossiya was targeted by the U.S., and Mordashov has a 6 percent holding of this bank. Considering the unstable relationship between the two countries, this final sale marking the exit of the U.S. market could not have come at a better time for the Russian steel giant.
The U.S. steel market has been suffering since the financial crisis, and was no longer as lucrative. As a result, in 2010, Severstal began selling their plants. Earlier this month, Severstal sold their coal unit to Canada's Corsa Coal Corp for $140 million.
This final sale caused Severstal stocks to increase 1.4 percent at time of close. Steel Dynamics was also up, 6.59 percent at time of publishing, however, AK Steel was down 4.42 percent at time of publishing. The sales are not subject to any financing conditions, so they should close relatively quickly, with an aim to be completed at the end of 2014.
This article is from the archive of our partner The Wire.