Steel Dynamics Inc. (nasdaq/gs:STLD) today announced that it has entered into a definitive agreement to acquire 100 percent of Severstal Columbus LLC (“Columbus”) from OAO Severstal. Located in northeast Mississippi, Columbus is one of the newest and most technologically advanced mini-mills in North America. Steel Dynamics will purchase Columbus for $1.625 billion in cash, subject to customary transaction purchase price adjustments.

The acquisition expands Steel Dynamics’ annual steel shipping capacity to 11.0 million tons, representing an approximate 40 percent increase. The additional exposure to the high-growth OCTG and automotive segments complements Steel Dynamics’ market offerings.

Commissioned in 2007, Columbus is one of the only North American flat roll mills to have 76 inch wide hot roll, 74 inch wide cold roll, and 72 inch wide galvanized sheet capabilities. These and other production capabilities will broaden Steel Dynamics’ product portfolio with regard to width, gauge and strength and enhance the Company’s position as a leading North American steel producer.

“The acquisition of Columbus represents a significant step in the continuation of our growth strategy,” stated Chief Executive Officer, Mark Millett. “It leverages our core strengths, and at the same time fulfills our initiatives to further increase value-added product and market diversification. We enthusiastically look forward to welcoming the Columbus employees and customers into the Steel Dynamics family, and working with them to drive future growth and success.”

“We have been positioning our balance sheet and organizational structure for growth such as this,” continued Millett, “and we believe this acquisition will result in a prudent capital structure that will allow us to again return to our preferred net debt leverage of less than three times trailing EBITDA within a reasonable timeframe. The expected earnings accretion and increased scale make this transaction a meaningful strategic opportunity for our shareholders and all of our employees.”

The transaction is expected to be immediately accretive to earnings and cash flow per share, and to generate approximately $30 million in pretax earnings synergies per annum.