By BOB OLIVER
DEARBORN — Russian-based steel manufacturer Severstal has agreed to sell its Dearborn plant to Ohio-based AK Steel Corp. for $700 million.
According to a press release from Severstal, the deal is expected to be finalized by the end of the year.
“The acquisition of Severstal Dearborn allows us to grow our business profitability and better serve our customers,” AK Steel President and CEO James L. Wainscott said. “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.”
He added that AK Steel intends to “utilize all of Dearborn’s production units and the company has no plans to cease operations at any of its current steelmaking or steel finishing facilities.”
The acquisition is expected to raise the company’s annual shipments of finished steel to around 7.5 million tons
“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,” Wainscott said.
About 1,800 people are employed at the plant at 4001 Miller Road on part of the former Rogue Steel complex.
Severstal also announced it is selling its other U.S. facility in Columbus, Miss. for $1.63 billion to Steel Dynamics,
OAO Severstal CEO Alexey Mordashov said the work to prepare and sign the agreements to sell the assets was launched in the end of 2013 and is now finalized.
“The sale of Columbus and Dearborn unlocks substantial value to Severstal’s shareholders,” Mordashov said. “On behalf of Severstal’s management I would like to express gratitude to the whole team at Dearborn and Columbus for their input in making Severstal North America one of the most efficient steel producers” in the United States.
The announcement of the sale of the Dearborn plant comes a few months after Severstal was awarded a revised permit from the Michigan Department of Environmental Quality to continue to emit its current level of pollutants into the air.
The new permit allows the company to double its carbon monoxide emissions, allow for PM10 — or fine-particle dust — emissions to rise between two and five times and lead emissions to increase hundreds of times, though both MDEQ and Severstal officials have indicated that the permit will not actually allow an increase in pollution, but will more accurately reflect what the plant has been emitting since 2006 when the initial permit was issued.
The new permit brought controversy with it, though, as many residents have filed complaints with the MDEQ centered on health issues associated with fallout, smoke and other emissions from the plant.
When issuing the revised permit, MDEQ Air Quality Division Chief Vince Hellwig said Severstal has been issued 38 notices of violation for pollution from the MDEQ since 2010, but that the new permit would enhance the emission and operational monitoring requirements and expand testing requirements for the plant moving forward.
(Bob Oliver can be reached at [email protected].)