Ohio steel company acquires assets in Severstal, part owner of M - WBOY - Clarksburg, Morgantown: News, Sports, Weather

Ohio steel company acquires assets in Severstal, part owner of Mountain State Carbon

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  • Many WV coal counties losing revenue

    Many WV coal counties losing revenue

    Monday, August 8 2016 10:15 AM EDT2016-08-08 14:15:05 GMT

    As Appalachian coal production continues its drastic decline, West Virginia’s coal-producing counties are  not only losing people as lifelong residents are forced to flee their homes in order to find work, but in many cases, they’re also relinquishing millions of dollars from their budgets.

    As Appalachian coal production continues its drastic decline, West Virginia’s coal-producing counties are  not only losing people as lifelong residents are forced to flee their homes in order to find work, but in many cases, they’re also relinquishing millions of dollars from their budgets.

Ohio-based AK Steel has signed a $700 million cash agreement to acquire Severstal North America’s integrated steelmaking assets in Dearborn, Michigan, as well as a cokemaking facility and interests in three joint ventures that process flat-rolled steel products, the company announced July 21.

Severstal North America, one of the largest steelmakers in the United States, has two wholly-owned main plants in Dearborn and Columbus, Mississippi, as well as two joint ventures, including Mountain State Carbon in Follansbee, West Virginia, and Spartan Steel Coating in Monroe, Michigan.

Mountain State Carbon is a jointly-owned venture that was formed in 2005. The upstream facility operates four coke oven batteries, providing high-quality coke for steelmaking operations.

“The acquisition of Severstal Dearborn allows us to grow our business profitability and better serve our customers,” James L. Wainscott, chairman, president and CEO of AK Steel, said in a news release. “It furthers our automotive strategy and strengthens our carbon steelmaking footprint. It also combines great employees at Dearborn with great employees at AK Steel to strengthen a terrific company that is better able to compete, and to win, in the global steel marketplace. We welcome the employees of Dearborn to AK Steel."

The acquisition also increases AK Steel’s operational flexibility and enables significant cost-based synergies, according to the release.

“In addition to operational and productivity enhancements, the acquisition will create purchasing, transportation and overhead cost savings,” Wainscott added. “We expect the transaction to be immediately accretive to our earnings and create significant long-term value for AK Steel, our employees, customers and shareholders.”

The company anticipates annual cost-based synergies of approximately $50 million, with approximately $25 million realized in the first full year following the closing of the acquisition.

Headquartered in West Chester, Ohio, AK Steel, a major flat-rolled carbon, stainless and electrical steel product producer, operates seven steel plants and two tube manufacturing plants across Indiana, Kentucky, Ohio and Pennsylvania.

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