OREANDA-NEWS. Evraz Group S.A. (LSE: EVR) (”Evraz”) and Oregon Steel Mills (NYSE: OS) (“Oregon Steel”) today announced that they have signed a definitive agreement under which Evraz will acquire Oregon Steel for $63.25 per share, or an aggregate price of approximately $2.3 billion.

The offer price of $63.25 per share represents a premium of 22.3% to Oregon Steel's three-month volume weighted average stock price or a premium of 30.3% to its six-month volume weighted average stock price.
 
Under the terms of the agreement, a newly formed Evraz subsidiary will make a cash tender offer for all shares of Oregon Steel common stock and then merge with Oregon Steel. The board of directors of Oregon Steel has unanimously recommended that the shareholders of Oregon Steel accept the offer.
 
The offer, which is expected to commence during the week of November 27, 2006, will be subject to customary conditions, including anti-trust and other regulatory clearances and the acquisition by Evraz of a majority of Oregon Steel’s shares. The offer will be followed by a merger at the same price. Upon completion of the transaction, Oregon Steel will become a subsidiary of Evraz.
     
“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. “The acquisition of Oregon Steel represents a solid platform for Evraz as a footprint in North America, one of the most important markets globally. This will secure an important place on the attractive plate market and in the expanding pipe business in North America.”
 
Evraz believes that the combination will allow both companies to realise operating synergies based on steady supplies of high quality slabs from Evraz steel mills.  Furthermore, Evraz anticipates Oregon Steel’s highly efficient pipe operations will provide it access to the expanding North American oil and gas markets.  The combined company will produce over 16.8 million tonnes of crude steel and will have over 17.4 million tonnes of steel shipments in 2006.
 
Evraz expects that Oregon Steel will maintain its head office in Portland, Oregon, and does not expect any material changes to its personnel following the completion of the transaction.
 
Credit Suisse is acting as exclusive financial advisor to Evraz and will be the dealer-manager for the tender offer. UBS Securities LLC is acting as lead financial advisor to Oregon Steel in the transaction, and KeyBanc Capital Markets delivered a fairness opinion to Oregon Steel’s board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Evraz, and Covington & Burling LLP and Schwabe, Williamson & Wyatt, PC are acting as legal counsel to Oregon Steel.