Russian mining and steel company, Severstal, has announced the sale of its European steel distribution network, Severstal Distribution, to Marcegaglia Carbon Steel, a subsidiary of Italian steel rerolling group Marcegaglia. The sale allows Severstal to evade EU sanctions against its majority shareholder, Mr. Alexey Mordashov, which made it impossible for Severstal’s distribution division to operate in Europe.
The assets and jobs will be transferred to the new owner, and Marcegaglia will be able to establish a commercial presence in Northern Europe and the Baltic countries. The purchase will enable the restart of distribution activities firstly in Latvia, and then in Poland and Ukraine.
Severstal Distribution, founded in 1992 and headquartered in Latvia, supplied Severstal’s steel products to the EU and Ukraine, with a volume covering 30% of the Baltic countries’ apparent consumption of hot-rolled and galvanized coils and shaped pipes. The unit sold 1.85 million metric tonnes, or over half of Severstal’s total exports, in 2021, with turnover reaching Eur1.53 billion.
Marcegaglia Carbon Steel has a production capacity of 4.65 million metric tonnes per year of flat-rolled products and welded tubes, which will now be processed and distributed through the Severstal Distribution network, renamed Marcegaglia Baltics. The companies did not disclose the value of the deal, but payment remains frozen in a special escrow account until the EU sanctions regime implemented following the Russian invasion ceases.
Source: Steelguru
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