Dallas, Texas 07/23/2014 (FINANCIALSTRENDS) – AK Steel Holding Corporation (NYSE:AKS) manufacturer of various types of steel has announced the acquisition of steelmaking company’s assets located at Dearbon. The deal which will see one of the largest North American steel maker buying a major stake in Severstal’s Dearborn facility in MI, for over $700 million in cash.
The deal includes the coke-making unit, besides three joint-ventures for flat-rolled products, which Dearborn has already in place.
AK Steel Holding Corporation (NYSE:AKS) announced that it will finalize the buyout by the last quarter of 2014 in-line with the approvals as well as conditions of regulatory bodies in the country. The US steel maker is able to venture into this brand new acquisition by funding from ‘bridge’ facility Credit Suisse is currently offering the company. The major part of the financing will be with the help of debt as well as equity securities.
The company is also expected to cut-back on expenditure such as purchase, overhead costs as well as transport. This would amount to savings to the value of $50 million, which
AK Steel Holding Corporation (NYSE:AKS) is expected to see $25 million raised in the first year after the acquisition is completed.
Dearborn facility is now equipped to hot as well as cold roll sheet besides, hot dip galvanized products. All of the production units of this facility will now be used by AK Steel. The current capacity of this unit is 2.5 million tons, with relation to finished steel per annum. Soon, AK Steel is expected to supersede the production and increase it to 7.5 million tons per annum.
AK Steel which is an end-to-end steel manufacturer with flat-rolled carbon as well as electrical steel and stainless steel is also a known name in tubular products as well.