Severstal, the second-largest Russian steelmaker is to acquire a 62% stake in the Italian steel company Lucchini for 450 million Euros – the proceeds from the deal will be used to reduce Lucchini’s financial debt.
Lucchini, founded by Luigi Lucchini after the Second World War, employs around 9.000 people and has 20 industrial plants located in Italy, France, Poland, Sweden and the UK.
The Manchester, UK works was acquired by the Lucchini Group in November 1999 from ADTranz (a company belonging to the Daimer-Chrysler Group) and was renamed Lucchini UK – Wheel Systems Division, as a division of the already existing Lucchini UK, a company established for distributing the Group’s products in England.
Annually, Lucchini as a whole, produces around 4.0 million tons of steel in various forms and sizes, including: hot rolled long products (wire rod, bars and billets), railway products (rails and switches and parts for rolling stock), castings, forgings, tool steels, bright steels (drawn, peeled, ground and shaved) and semi-finished products (continuous cast billets, slabs, ingots and pig iron for foundries).
For its part, the Russian steel giant Severstal employs 130,000 people, operates with more than 30 plants in 14 regions across Russia and in the US, and produces approximately 12.8 million tons of steel annually. Severstal’s net profit in 2004 was $1,344 million, compared to $591 million for the FY2003, an increase of 127%.
The steel deal is expected to be completed in 60 days, subject to European Antitrust clearance.