October 11, 2008

Severstal completes acquisition of Sparrows Point

OAO Severstal completed its previously announced acquisition of Sparrows Point, a fully integrated steel mill based at Baltimore in Maryland of United States from ArcelorMittal.

Severstal has received regulatory approval from the United States Department of Justice and the Committee on Foreign Investment in the United States.

Sparrows Point has a capacity of 3.6 million tons of crude steel and shipped 2.3 million tons of finished steel products in 2007; it is the only integrated producer of flat rolled steel on the US East Coast and is a major North American supplier of tin mill products.

The acquisition is expected to be accretive in year one based on current projections of costs and prices and offers significant value creation potential. Additionally, Severstal expects substantial synergies with its current US operations in Dearborn, Michigan and Columbus, Mississippi.

Merrill Lynch & Co. acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel to Severstal.