Severstal has acquired A Group’s distribution business in Russia from structures associated with Alexey Zaitsev, Interfax reported on 4 April 2024. The price was not disclosed. Steel-structure and sandwich-panel manufacturing plants were excluded. CEO Alexander Shevelev said combined distribution sales could reach three million tonnes in 2024: a target, rather than a completed annual result.
- The acquired business would retain the A Group brand.
Company results before the acquisition
Interfax’s 2 February 2024 report put Severstal’s 2023 revenue at RUB 728.3 billion, up 7%, and EBITDA at RUB 262.2 billion, up 22%. The EBITDA margin was 36%. Steel production increased 5% to 11.3 million tonnes, while steel-product sales fell 2% to 10.733 million tonnes. Sales of high-value-added products rose 11% to 5.266 million tonnes. These figures describe Severstal’s preceding year, before the April purchase. They are company operating and financial results, rather than sales of the subsequently acquired distribution business, and should retain that reporting boundary.
The earlier approval of a Baltic sale
A separate Interfax report dated 5 April 2023 recorded European Commission approval for Marcegaglia’s acquisition of Severstal Distribution, based in Latvia. The business had been founded in 1992 and had operated under the name AS Severstallat until 2014. It included a flat-steel processing centre. This was the regulatory approval stage of an earlier transaction involving a different distribution asset. Approval on that date did not establish that ownership had already transferred.
Completion had its own date and terms
On 21 April 2023, Interfax reported that Marcegaglia had completed the purchase of 100% of Severstal Distribution. The acquired business was renamed Sia Marcegaglia Baltics; the transaction value was not disclosed. Payment to the seller was placed in a frozen escrow account while the applicable sanctions regime remained in force. Severstal attributed the sale to restrictions that had made its European operations essentially impossible. Those conditions belonged to the Latvian disposal. They do not describe the payment arrangements for April 2024’s purchase of A Group’s distribution business.
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