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Essar Global Closes Acquisition of Algoma Steel
06/21/2007 - Essar Global completes its acquisition of Algoma Steel at a valuation of Canadian $1.85 billion, an all-cash consideration of $56 per share.
Essar Global has completed its acquisition of Algoma Steel Inc. at a valuation of Canadian $1.85 billion, an all-cash consideration of $56 per share. The acquisition was carried out through Essar Steel Holdings Limited, Essar’s wholly owned subsidiary.
Algoma Steel now becomes a part of Essar Global, with Denis Turcotte continuing to serve as Algoma’s Chief Executive Officer. Algoma will now have access to Essar's range of value-added products in the automobile, white goods, construction and engineering industries.
“As part of the Essar group, we will be able to exploit new growth opportunities and implement the best technological and engineering practices from across both organizations. This is a win-win situation for all Algoma stakeholders. Our customers, employees, and community can look forward to investment that will reposition the Company as a North American leader in steel", added Denis Turcotte, CEO of Algoma.
Algoma brings a new dimension to Essar Steel's North American marketing operations. The enlarged business will concentrate on further reducing the costs of production, widening the product range and developing new applications.
“We are delighted to welcome Algoma to the Essar family,” said Mr. Shashi Ruia, Chairman of Essar Global. “Algoma is the keystone of our expansion into the North American markets. We look forward to working with Algoma's impressive team to take forward our vision of world class, low cost steel assets, with a global footprint. In addition, there are plenty of synergies available between our two operations.”
Essar Global is an international conglomerate operating in six business areas — steel, energy, power, communications, shipping & logistics and construction. It has offices world-wide and employs approximately 20,000 people, including over 3500 persons in the United States. The group has built a portfolio of assets with expected revenues of US$10 billion in the year to March 2008.
Essar Steel Holdings Limited (ESHL) is a global producer of steel with a footprint covering India, Canada, the U.S., Middle East, and Asia. It is a fully integrated flat carbon steel manufacturer, with operations from iron ore to ready-to-market products. ESHL has a current capacity of eight million tonnes. With its expansion plans in India and other parts of Asia and North America, Essar Steel’s capacity will reach 20 to 25 million tonnes by
2012. Its products are sold in a wide range of consumer sectors, such as automotive, white goods, construction, engineering, and ship-building.
Algoma Steel is an integrated steel producer based in Sault Ste. Marie, Ont., Canada. Revenues are derived primarily from the manufacture and sale of rolled steel products including hot and cold rolled sheet and plate.
