Sewickley-based Esmark has been named the winning bidder in the government auction of a Serbian steel mill U.S. Steel abandoned three years ago.
Esmark said today it will take an 80.1 percent stake in Zelezara Smederevo Steel Works outside Belgrade. The company plans to invest about $400 million in the venture over the next five years and will retain the plant’s work force of about 5,000.
Chairman and CEO James P. Bouchard will travel to Belgrade this week to negotiate final terms of a strategic partnership with Serbian government officials.
“We are absolutely thrilled that the government of Serbia has selected us as their strategic partner,” Mr. Bouchard said in a statement.
A spokesperson for Serbian Finance Minister Dusan Vujovic said the government expects a contract will be signed by the end of the month.
U.S. Steel sold the mill back to the Serbian government for $1 in January 2012, saying it could no longer afford to incur operating losses. The mill had been plagued by weak economic conditions in southern Europe and cutthroat competition.
The Pittsburgh steel producer acquired the plant in 2003 as part of a push into Europe, where it still operates a steel plant in Slovakia.
Esmark’s businesses include steel processing and distribution, oil and gas exploration, aviation and real estate. The company plans to convert a Yorkville, Ohio, steel finishing mill formerly operated by Wheeling-Pittsburgh Steel into a terminal to support oil and gas producers in the region.
This won’t be Mr. Bouchard’s first time operating a steel plant. The former U.S. Steel official took over Wheeling-Pitt in 2006 and sold it two years later to Russian producer OAO Severstal.
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