Za Vas – Severstal Wins Esmark!

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Ferrous Metals, M&A Activity

In late afternoon news on Wednesday my Crain’s Chicago alert came in with the headline “Russan Suitor Wins Esmark”. We have been reporting on this story for a couple of weeks now because the battle for Esmark has been well, rather exciting  and interesting.   To recap, two companies bid for Esmark, Essar of India and OAO Severstal of Russia.

The deal in the making has been exciting because first, it brings new players to the US market which fosters additional competition. And with the steel market we’ve seen, how could that development not be a good thing? Second, I personally believe Severstal would make for the better suitor based on one tiny little point that remained quite buried in much of the press coverage on this story. That one tiny point relates to Severstal developing a more favorable agreement for the United Steel Worker’s union. Now whether you are a union supporter or not is irrelevant. What is relevant is that the winning suitor knew that to make this acquisition successful, it needed the full support of Esmark employees. Kudos to Severstal for passing the “people” test. Now let’s see how they do on the rest…

–Lisa Reisman

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