Severstal buys Arcelor Mittal stake in Russian JV

Steel maker Severstal has reached an agreement with Arcelor Mittal to acquire its stake in a joint venture situated in Russia, although NRI steel tycoon L N Mittal-controlled company will remain non-exclusive agent for some of its products.

"Severstal has reached agreement with Arcelor Mittal to buy the latter's 25 per cent stake in their Severgal joint venture, located at the Severstal's Cherepovets site, in which Severstal owns 75 percent stake," the Russian steel major said.

Arcelor Mittal is terminating the Extragal License Agreement with Severgal and will remain a non-exclusive agent for some Severgal products, it said.

Last year, Severstal and Mittal Steel were locked in a bout to seek control over the European giant Arcelor, finally won by the London-based NRI steel baron.

According to local experts, the Severgal JV set up by Arcelor before its takeover by Mittal in 2006, was originally established to serve the former's CIS automotive market.

While the JV has the capacity to produce coated products for both the industry and the automotive markets, the hot dip galvanising line is currently mostly dedicated to supplying the booming domestic industry market, the release said.