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April, 2008 |
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Merrill Lynch Advises Russian Steel Maker in Acquisition of Chinese Competitor
 Merrill Lynch bankers in Moscow, Hong Kong and London collaborated to assist a new client, the Evraz Group, in the Russian mining giant’s historic acquisition of Chinese competitor Delong Holdings.
The deal, for $1.5 billion, marked the first time a Russian steel and mining business acquired a Chinese company in the industry, and one of the first times a company in Russia purchased a Chinese firm. Merrill Lynch acted as exclusive financial advisor to Evraz.
The Evraz group, founded in 1992 as a small metal trade company, is today the largest producer of steel and steel products in Russia and the fifth largest in the world. With a market capitalization of $33 billion, the company — partly owned by Russian billionaire Roman Abramovich — has been expanding to markets, including Europe, Africa and the United States. Most recently, Evraz acquired U.S.-based Claymont Steel Holdings.
But China, the world’s fastest-growing market, eluded the steel maker. Delong Holdings is a relatively small company, but the planned acquisition, subject to review by the Chinese government, gives Evraz access to a market that is responsible for more than 40 percent of the steel consumed and produced globally.
Under the agreement, Evraz will acquire 51 percent of the share capital of Delong Holdings over a period of time, and later offer to acquire the rest of the company for the same price, 3.9459 Singapore dollars a share (U.S. $2.80). |
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