Russian Steelmaker's Sale of U.S. Interests Includes Dearborn Plant

The nearly 100-year-old Severstal steel plant in Dearborn has been sold again as Russian steelmaker OAO Severstal has decided to exit the U.S. market.

The Dearborn and Columbus, MS, have been sold for a combined $2.33 million, the company said Monday, the Detroit Free Press reports.

AK Steel is buying the Dearborn plant, while Steel Dynamics is buying the plant in Mississippi. The Dearborn plant is selling for $700 million in a deal that also includes a petroleum coke-making plant and interests in three ventures that process flat-rolled steel products, the Associated Press reports.

The deal is expected to be finalized in the fourth quarter of this year. AK Steel said it has no plans to halt any operations at the plant or in any of the associated companies. Severstal employs about 1,800 workers in Dearborn.

Severstal has reportedly been looking to divest its U.S. interests after tensions heated up in Ukraine and the West began to threaten economic sanctions, though Severstal was not specifically targeted. Relations between Russia and the international community worsened last week with the downing of a Malaysian jet, and the U.S. is under added pressure to impose sanctions.

In a statement, OAO Severstal CEO Alexey Mordashov said the sale of the two plants “unlocks substantial value to Severstal’s shareholders.”

In May, the Michigan Department of Environmental Quality allowed Severstal to release higher levels of pollutants into the air under a deal that some critics said was too cozy.

AK Steel, based in West Chester, OH, said acquiring the Dearborn plant will allow the company to sell more steel to the automotive industry.

“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,” James L. Wainscott, chairman, president and CEO of AK Steel, said in a statement. “We welcome the employees of Dearborn to AK Steel.”