The stake in Lucchini SpA, which produces high-quality steels and long products in Italy and France and has a distribution network in Europe, was purchased through Severstal's wholly-owned subsidiary Upcroft. Under the deal, Severstal will also receive a pro rata number of warrants convertible into Lucchini shares, the company said.
Commenting on the deal, Severstal CEO Alexei Mordashov said, "We are delighted to be increasing our investment in Lucchini. It is a great business, which contributed $3.3 bln of revenues to Severstal in 2006. We plan to continue to invest in the business to further improve productivity and efficiency."
Giuseppe Lucchini, the president and a core shareholder of Lucchini SpA, said: "Such a decision has been taken in harmony with Severstal and with its main shareholder, thanks to good cooperation and human relations that have been created for over two years."
Severstal is the head company of Severstal Group and its metals division. As of December 2006, 82.8% of the company's authorized capital was directly or indirectly owned by Alexei Mordashov, one of Russia's richest men. Severstal's net income in 2006 was $1.18 billion.
