21 Apr 2023 16:32

Italy's Marcegaglia closes deal to acquire Severstal's Latvian subsidiary

MOSCOW. April 21 (Interfax) - Italian steelmaker Marcegaglia has closed the deal to buy a 100% stake in Severstal subsidiary SIA Severstal Distribution (SSD, Latvia), the Italian holding said in a statement.

Marcegaglia did not disclose the terms of the deal but said that "the seller's fee is frozen in the escrow account" while the sanctions regime is in effect. Latvia-based SSD has been renamed Sia Marcegaglia Baltics.

Severstal confirmed the sale of the asset, noting that "EU sanctions against Alexei Mordashov have essentially made it impossible for the distribution unit to operate in Europe."

Latvian-based SSD was founded in 1992 (it was called AS Severstallat until the end of 2014) and supplied steel products from Severstal sites to Northern, Central and Eastern Europe. The company owns the largest service center for flat steel processing in the region, and also has a sales office in Poland.

This is not the first asset the Italian company has purchased from Russian owners. In 2019, Marcegaglia bought the Palini e Bertoli plant from Evraz in a deal valued at 40 million euros.

Last year, Severstal was included in the SDN List along with its principal owner Alexei Mordashov and members of his family; Mordashov himself is also on the European sanctions list. After the shareholder came under sanctions, the company announced that it had stopped exports to Europe. Mordashov estimated Severstal's losses due to the seizure of stocks in Europe and the seizure of accounts at approximately $400 million.