Oregon Steel Mills (NYSE:OS)
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From May 2019 to May 2024
Evraz Group S.A. (LSE:EVR) (”Evraz”)
and Oregon Steel Mills (NYSE:OS) (“Oregon Steel”)
today announced that they have signed a definitive agreement under which
Evraz will acquire Oregon Steel for $63.25 per share, or an aggregate
price of approximately $2.3 billion. The offer price of $63.25 per share
represents a premium of 22.3% to Oregon Steel's three-month volume
weighted average stock price or a premium of 30.3% to its six-month
volume weighted average stock price.
Under the terms of the agreement, a newly formed Evraz subsidiary will
make a cash tender offer for all shares of Oregon Steel common stock and
then merge with Oregon Steel. The board of directors of Oregon Steel has
unanimously recommended that the shareholders of Oregon Steel accept the
offer.
The offer, which is expected to commence during the week of November 27,
2006, will be subject to customary conditions, including anti-trust and
other regulatory clearances and the acquisition by Evraz of a majority
of Oregon Steel’s shares. The offer will be
followed by a merger at the same price. Upon completion of the
transaction, Oregon Steel will become a subsidiary of Evraz.
“We are pleased to announce another
transaction in line with our long-term strategy to develop higher value
downstream markets complementary to Evraz slab production. This
transaction will provide compelling benefits to both Evraz and Oregon
Steel,” said Alexander Frolov, Evraz chairman. “The
acquisition of Oregon Steel represents a solid platform for Evraz as a
footprint in North America, one of the most important markets globally.
This will secure an important place on the attractive plate market and
in the expanding pipe business in North America. The combined company
will also be the leading rail producer globally. Oregon Steel will
benefit from having a reliable source of slabs, a necessity in the steel
business. We are excited to bring together these two companies, which
combined will enjoy exposure to some of the fastest growing, most
profitable steel segments. Together, we will form a world-class company
with efficient operations, diverse revenue streams and high margins.”
Jim Declusin, Oregon Steel Mills president and chief executive officer,
said: “Our management team and employees have
successfully executed the strategy that was set forth three years ago
and have delivered significant growth in sales and profitability, while
investing in our facilities and expanding capacities. Over that period,
we have created significant value for our shareholders increasing our
share price by 1,802%, peaking at an all-time high of $58.96. We believe
that this offer represents an attractive opportunity for Oregon Steel’s
shareholders to realise the value of their investment in the Company. We
are pleased to join with Evraz and become part of a leading global
steelmaker with complementary strengths and markets. In the current
steel environment, it is important to gain scale and expand market
presence through consolidation. This combination will provide us with
the critical elements, including a secure source of slabs and additional
financial resources, needed to compete in new and growing markets. We
believe that this transaction will create new opportunities to share
technology, research and development and enhance our combined leading
positions in products such as rail.”
Evraz believes that the combination will allow both companies to realise
operating synergies based on steady supplies of high quality slabs from
Evraz steel mills. Furthermore, Evraz anticipates Oregon Steel’s
highly efficient pipe operations will provide it access to the expanding
North American oil and gas markets. The combined company will produce
over 16.8 million tonnes1 of crude steel and
will have over 17.4 million tonnes1 of steel
shipments in 2006.
Evraz expects that Oregon Steel will maintain its head office in
Portland, Oregon, and does not expect any material changes to its
personnel following the completion of the transaction.
Credit Suisse is acting as exclusive financial advisor to Evraz and will
be the dealer-manager for the tender offer. UBS Securities LLC is acting
as lead financial advisor to Oregon Steel in the transaction, and
KeyBanc Capital Markets delivered a fairness opinion to Oregon Steel’s
board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as
legal counsel to Evraz, and Covington & Burling LLP and Schwabe,
Williamson & Wyatt, PC are acting as legal counsel to Oregon Steel.
The tender offer described herein has not commenced. The
description contained herein is neither an offer to purchase nor a
solicitation of an offer to sell shares of Oregon Steel. At
the time the tender offer is commenced, Oscar Acquisition Merger Sub,
Inc. and Evraz intend to file a Tender Offer Statement on Schedule TO
containing an offer to purchase, forms of letters of transmittal and
other documents relating to the tender offer and Oregon Steel intends to
file a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the tender offer. Oscar Acquisition Merger Sub, Inc., Evraz
and Oregon Steel intend to mail these documents to the stockholders of
Oregon Steel. These documents will contain important
information about the tender offer and stockholders of Oregon Steel are
urged to read them carefully when they become available. Stockholders
of Oregon Steel will be able to obtain a free copy of these documents
(when they become available) at http://www.evraz.com/
and http://www.osm.com/ and the
website maintained by the Securities and Exchange Commission at http://www.sec.gov/.
In addition, stockholders will be able to obtain a free copy of these
documents (when they become available) from Evraz by contacting Evraz at ir@evraz.com
or +7-495-2321370, attention: Investor Relations, or from Oregon Steel
by contacting Oregon Steel at +1 503 240 5223 attention: Investor
Relations.
1 1 (metric) tonne equals 1,000 kilograms, or
2,204.6 pounds
Forward Looking Statement
This press release contains forward-looking statements, including
statements regarding the expected benefits of the acquisition, which
involve a number of risks and uncertainties. These statements are based
on Evraz’s and Oregon Steel’s
current expectations and beliefs. Actual results could differ materially
from the results implied by these statements. Factors that may cause or
contribute to such differences include: the risk that the conditions to
the offer or the merger set forth in the merger agreement will not be
satisfied, changes in both companies’
businesses during the period between now and the closing, developments
in obtaining regulatory approvals for the transaction; the successful
integration of Oregon Steel into Evraz’s
business subsequent to the closing of the acquisition; timely
development, competitive products and pricing, as well as fluctuations
in demand; cost and availability of raw materials; potential equipment
malfunction; and plant construction and repair delays; the ability to
retain key management and technical personnel of Oregon Steel; adverse
reactions to the proposed transaction by customers, suppliers and
strategic partners and other risks described in Oregon Steel’s
report on Form 10-K filed with the Securities and Exchange Commission
(SEC) for the fiscal year ended December 31, 2005. Oregon Steel and
Evraz are under no obligation to (and expressly disclaim any such
obligation to) update or alter their forward-looking statements whether
as a result of new information, future events or otherwise.
Evraz Group S.A. is one of the largest vertically-integrated
steel and mining businesses with operations mainly in Russia. In 2005,
Evraz Group produced 13.9 million tonnes of crude steel. Evraz Group’s
principal assets include three of the leading steel plants in Russia:
Nizhny Tagil (NTMK) in the Urals region and West Siberian (Zapsib) and
Novokuznetsk (NKMK) in Siberia, as well as Palini e Bertoli in Italy and
Vitkovice Steel in the Czech Republic. Its fast-growing mining
businesses comprise Evrazruda, the Kachkanarsky (KGOK) and Vysokogorsky
(VGOK) iron ore mining complexes and Neryungriugol coal company and
equity interests in the Raspadskaya and Yuzhkuzbassugol coal mines. The
mining assets enable Evraz Group to be a vertically-integrated steel
producer. Evraz Group also owns and operates the Nakhodka commercial sea
port, in the Far East of Russia, which facilitates its access to Asian
export markets. Evraz vanadium operations comprise Strategic Minerals
Corporation, USA, and a 24.9% equity interest in Highveld Steel and
Vanadium Corporation, South Africa.
For further information visit www.evraz.com
Oregon Steel Mills, which is headquartered in Portland, Oregon,
is organized into two divisions. The Oregon Steel Division produces
as-rolled and heat-treated steel plate, coil, welded pipe (both large
and small diameter line pipe and casing) and structural tubing from
plants located in Portland, Oregon, and Camrose, Alberta, Canada. The
Rocky Mountain Steel Mills Division, located in Pueblo, Colorado,
produces steel rail, rod and bar, and seamless tubular products.
For further information visit www.osm.com
Evraz Group S.A. (LSE:EVR) ("Evraz") and Oregon Steel Mills
(NYSE:OS) ("Oregon Steel") today announced that they have signed a
definitive agreement under which Evraz will acquire Oregon Steel for
$63.25 per share, or an aggregate price of approximately $2.3 billion.
The offer price of $63.25 per share represents a premium of 22.3% to
Oregon Steel's three-month volume weighted average stock price or a
premium of 30.3% to its six-month volume weighted average stock price.
Under the terms of the agreement, a newly formed Evraz subsidiary
will make a cash tender offer for all shares of Oregon Steel common
stock and then merge with Oregon Steel. The board of directors of
Oregon Steel has unanimously recommended that the shareholders of
Oregon Steel accept the offer.
The offer, which is expected to commence during the week of
November 27, 2006, will be subject to customary conditions, including
anti-trust and other regulatory clearances and the acquisition by
Evraz of a majority of Oregon Steel's shares. The offer will be
followed by a merger at the same price. Upon completion of the
transaction, Oregon Steel will become a subsidiary of Evraz.
"We are pleased to announce another transaction in line with our
long-term strategy to develop higher value downstream markets
complementary to Evraz slab production. This transaction will provide
compelling benefits to both Evraz and Oregon Steel," said Alexander
Frolov, Evraz chairman. "The acquisition of Oregon Steel represents a
solid platform for Evraz as a footprint in North America, one of the
most important markets globally. This will secure an important place
on the attractive plate market and in the expanding pipe business in
North America. The combined company will also be the leading rail
producer globally. Oregon Steel will benefit from having a reliable
source of slabs, a necessity in the steel business. We are excited to
bring together these two companies, which combined will enjoy exposure
to some of the fastest growing, most profitable steel segments.
Together, we will form a world-class company with efficient
operations, diverse revenue streams and high margins."
Jim Declusin, Oregon Steel Mills president and chief executive
officer, said: "Our management team and employees have successfully
executed the strategy that was set forth three years ago and have
delivered significant growth in sales and profitability, while
investing in our facilities and expanding capacities. Over that
period, we have created significant value for our shareholders
increasing our share price by 1,802%, peaking at an all-time high of
$58.96. We believe that this offer represents an attractive
opportunity for Oregon Steel's shareholders to realise the value of
their investment in the Company. We are pleased to join with Evraz and
become part of a leading global steelmaker with complementary
strengths and markets. In the current steel environment, it is
important to gain scale and expand market presence through
consolidation. This combination will provide us with the critical
elements, including a secure source of slabs and additional financial
resources, needed to compete in new and growing markets. We believe
that this transaction will create new opportunities to share
technology, research and development and enhance our combined leading
positions in products such as rail."
Evraz believes that the combination will allow both companies to
realise operating synergies based on steady supplies of high quality
slabs from Evraz steel mills. Furthermore, Evraz anticipates Oregon
Steel's highly efficient pipe operations will provide it access to the
expanding North American oil and gas markets. The combined company
will produce over 16.8 million tonnes(1) of crude steel and will have
over 17.4 million tonnes(1) of steel shipments in 2006.
Evraz expects that Oregon Steel will maintain its head office in
Portland, Oregon, and does not expect any material changes to its
personnel following the completion of the transaction.
Credit Suisse is acting as exclusive financial advisor to Evraz
and will be the dealer-manager for the tender offer. UBS Securities
LLC is acting as lead financial advisor to Oregon Steel in the
transaction, and KeyBanc Capital Markets delivered a fairness opinion
to Oregon Steel's board of directors. Cleary Gottlieb Steen & Hamilton
LLP is acting as legal counsel to Evraz, and Covington & Burling LLP
and Schwabe, Williamson & Wyatt, PC are acting as legal counsel to
Oregon Steel.
The tender offer described herein has not commenced. The
description contained herein is neither an offer to purchase nor a
solicitation of an offer to sell shares of Oregon Steel. At the time
the tender offer is commenced, Oscar Acquisition Merger Sub, Inc. and
Evraz intend to file a Tender Offer Statement on Schedule TO
containing an offer to purchase, forms of letters of transmittal and
other documents relating to the tender offer and Oregon Steel intends
to file a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the tender offer. Oscar Acquisition Merger Sub, Inc., Evraz
and Oregon Steel intend to mail these documents to the stockholders of
Oregon Steel. These documents will contain important information about
the tender offer and stockholders of Oregon Steel are urged to read
them carefully when they become available. Stockholders of Oregon
Steel will be able to obtain a free copy of these documents (when they
become available) at http://www.evraz.com/ and http://www.osm.com/ and
the website maintained by the Securities and Exchange Commission at
http://www.sec.gov/. In addition, stockholders will be able to obtain
a free copy of these documents (when they become available) from Evraz
by contacting Evraz at ir@evraz.com or +7-495-2321370, attention:
Investor Relations, or from Oregon Steel by contacting Oregon Steel at
+1 503 240 5223 attention: Investor Relations.
(1) 1 (metric) tonne equals 1,000 kilograms, or 2,204.6 pounds
Forward Looking Statement
This press release contains forward-looking statements, including
statements regarding the expected benefits of the acquisition, which
involve a number of risks and uncertainties. These statements are
based on Evraz's and Oregon Steel's current expectations and beliefs.
Actual results could differ materially from the results implied by
these statements. Factors that may cause or contribute to such
differences include: the risk that the conditions to the offer or the
merger set forth in the merger agreement will not be satisfied,
changes in both companies' businesses during the period between now
and the closing, developments in obtaining regulatory approvals for
the transaction; the successful integration of Oregon Steel into
Evraz's business subsequent to the closing of the acquisition; timely
development, competitive products and pricing, as well as fluctuations
in demand; cost and availability of raw materials; potential equipment
malfunction; and plant construction and repair delays; the ability to
retain key management and technical personnel of Oregon Steel; adverse
reactions to the proposed transaction by customers, suppliers and
strategic partners and other risks described in Oregon Steel's report
on Form 10-K filed with the Securities and Exchange Commission (SEC)
for the fiscal year ended December 31, 2005. Oregon Steel and Evraz
are under no obligation to (and expressly disclaim any such obligation
to) update or alter their forward-looking statements whether as a
result of new information, future events or otherwise.
Evraz Group S.A. is one of the largest vertically-integrated steel
and mining businesses with operations mainly in Russia. In 2005, Evraz
Group produced 13.9 million tonnes of crude steel. Evraz Group's
principal assets include three of the leading steel plants in Russia:
Nizhny Tagil (NTMK) in the Urals region and West Siberian (Zapsib) and
Novokuznetsk (NKMK) in Siberia, as well as Palini e Bertoli in Italy
and Vitkovice Steel in the Czech Republic. Its fast-growing mining
businesses comprise Evrazruda, the Kachkanarsky (KGOK) and
Vysokogorsky (VGOK) iron ore mining complexes and Neryungriugol coal
company and equity interests in the Raspadskaya and Yuzhkuzbassugol
coal mines. The mining assets enable Evraz Group to be a
vertically-integrated steel producer. Evraz Group also owns and
operates the Nakhodka commercial sea port, in the Far East of Russia,
which facilitates its access to Asian export markets. Evraz vanadium
operations comprise Strategic Minerals Corporation, USA, and a 24.9%
equity interest in Highveld Steel and Vanadium Corporation, South
Africa.
For further information visit www.evraz.com
Oregon Steel Mills, which is headquartered in Portland, Oregon, is
organized into two divisions. The Oregon Steel Division produces
as-rolled and heat-treated steel plate, coil, welded pipe (both large
and small diameter line pipe and casing) and structural tubing from
plants located in Portland, Oregon, and Camrose, Alberta, Canada. The
Rocky Mountain Steel Mills Division, located in Pueblo, Colorado,
produces steel rail, rod and bar, and seamless tubular products.
For further information visit www.osm.com