Essar Steel Acquires Integrated Steel Producer for US$1.1 Billion

Essar Steel Holdings Limited (ESHL), part of Essar Global Limited, today announced that it has agreed to acquire Esmark Inc. at an estimated enterprise value of USD 1.1 billion. ESHL has agreed to the material terms of a proposed tender offer for cash purchase price of USD 17 per share of all outstanding shares of Nasdaq listed Esmark Inc.

The proposed tender offer was unanimously accepted by the Board of Esmark and is subject to customary approvals including those of the US government and United Steel Workers.
Esmark plans to enter into definitive documentation upon expiration or waiver of the approximate 52 day “right to bid” period set forth in the collective bargaining agreement with the United Steelworkers. Esmark is a steel production and distribution company with a capacity of 2.4 MTPA and steel distribution centres across USA.

Commenting on the deal, Mr Shashi Ruia, Chairman, Essar Global said,” This is one more step in realizing our global steel vision of having world class low cost assets, with a global footprint. Having acquired Algoma and Minnesota Steel last year, this acquisition provides us with an excellent platform for the Canadian and North American markets. With the above acquisitions of Esmark and projects under implementation in Trinidad and Tobago, Essar Steel Holdings will have a 10 million tonnes of flat steel production in the Americas”

Within ten days of entering into definitive documentation, a wholly-owned subsidiary of Essar will effectuate the two-step acquisition by means of a front-end, cash tender offer for all of the outstanding shares of Esmark’s common stock, at $17.00 per share in cash. If greater than 50% of the outstanding shares are tendered, then a second-step, cash-out merger would follow in which all remaining shares of Esmark common stock will be converted into the right to receive $17.00

Posted May 6th,2008

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