Evraz Group agreed to buy Oregon Steel Mills (OS) for $63.25 a share, or $2.3 billion, in cash.
Luxembourg-based Evraz, which operates mostly in Russia, said the bid offers a premium of 22.3% to Oregon Steel's three-month volume weighted average stock price. The premium to Friday's closing price is 7%. Oregon shares rose 8% in early action Monday.
"We are pleased to announce another transaction in line with our long-term strategy to develop higher value downstream markets complementary to Evraz slab production. This transaction will provide compelling benefits to both Evraz and Oregon Steel," said Alexander Frolov, Evraz chairman.
Evraz believes that the combination will allow both companies to realize operating synergies based on steady supplies of high quality slabs from Evraz steel mills. Evraz said Oregon Steel's highly efficient pipe operations will provide it access to the expanding North American oil and gas markets.
Evraz expects that Oregon Steel will maintain its head office in Portland, Ore., and does not expect any material changes to its personnel following the completion of the transaction.