Russian mining and metals giant Severstal said on Tuesday it had offered $1.24 billion in cash for all the outstanding shares in U.S. steel producer and distributor Esmark Inc.
The company said in a statement it had made an offer to buy Esmark for $17 per share after U.S. trade union United Steelworkers (USW) rejected a proposed acquisition of Esmark by India's Essar Group.
Severstal said its own proposal had been supported by USW.
Severstal has developed a highly credible restructuring plan designed to derive maximum value from Esmark, including a 5-year capital improvement plan that carries the full support of USW, the company said in a statement.
Together, the combined company will become one of the North American leaders in flat rolled steel products, it said.
Merrill Lynch and Citigroup are acting as financial advisors on the deal.
Esmark earlier said it planned to accept a $670 million buyout offer from Essar, but USW demanded that the firm reject the merger as it would violate the union's contract with Esmark. Esmark said earlier on Tuesday it had responded to the USW saying it had honoured the provisions of the collective bargaining agreement. (Reporting by Polina Devitt and Maria Kiselyova, editing by Will Waterman)
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