Severstal: Esmark Has Untapped Potential

COO Gregory Mason says the plants and equipment have never realized their full potential, but Severstal will invest $250 million over five years to make sure they do.

MORGANTOWN, W.Va. (AP) -- Russia's OAO Severstal says West Virginia-based Esmark is a nice addition to the puzzle it's assembling in North America.

Chief Operating Officer Gregory Mason says the plants and equipment have never realized their full potential, but Severstal will invest $250 million over five years to make sure they do.

Esmark accepted Severstal's offer of $19.25 per share. Including the assumption of debt, the deal is valued at $1.25 billion. Mason said Thursday that it could be completed in a few months.

He said everything will be up for review, and he expects collaboration with the United Steelworkers on restructuring.

Mason said that even if optimizing production means a work force reduction, the cuts would come naturally, through attrition.

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