Steelworkers pleased with Esmark, Severstal merger

By Lisa Kerner

Charlotte, N.C., June 26 - The United Steelworkers called OAO Severstal's proposed acquisition of Esmark Inc. a victory for employees of Esmark subsidiary Wheeling-Pittsburgh Steel Corp.

"From the beginning, our support for Severstal was based on the company's willingness to improve upon our current contract and its commitment to invest specific, substantial capital in our plants," USW district 1 director Dave McCall said in a union statement.

On June 25, Esmark agreed to be acquired by Severstal for $19.25 in a transaction valued at $1.25 billion, including debt.

In addition to the merger agreement, Severstal agreed to purchase Esmark's $110 million term loan facilities from Essar Steel Holdings Ltd., a flat carbon steel manufacturer based in Essar, India.

In April, Essar Steel agreed to acquire Esmark for $670 million and extended a $110 million loan to Esmark to address a potential default, according to a prior news release. On May 20, Severstal made an offer to acquire Esmark.

Essar Steel and Severstal both offered $17.00 per share for the Wheeling, W.Va., steel producer. Severstal's offer, however, had the backing of the USW, which rejected Essar Steel's offer, a prior news release said.

On June 11, Essar Steel increased its offer for Esmark to $19.00 per share and said it was prepared to recognize the USW, assume the basic labor agreement and negotiate a new collective bargaining agreement on an expedited basis. Essar Steel then withdrew its bid for Esmark on June 25.

Severstal is a Moscow-based metals and mining company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.