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Wednesday, March 2, 2011

Renco buys 3 Severstal U.S. mills in $1.2 billion deal, (CHMF)

New York-based investment firm Renco Group said it agreed to buy three of Russian steel maker Severstal's (CHMF.MM) U.S. mills in order to create its own flat rolled steel business in a deal valued at $1.2 billion. Its new unit, RG Steel, will be the fourth-largest producer of flat rolled steel in the U.S., and take its place alongside other Renco assets, such as Humvee manufacturer AM General. In a separate statement, Severstal said it will receive $125 million in cash, a $100 million secured note and the repayment of $317 million of third party debt. Renco will also assume various Severstal liabilities totaling $650 million.