Severstal sold its sole distributor in the EU to the Italian Marcegaglia

The Latvian company Sia Severstal Distribution (SSD), owned by the Russian Severstal, was sold to the Italian Marcegaglia. As part of the Marcegaglia deal, SSD divisions in Poland and Ukraine departed. SSD is Severstal’s only asset in the EU.

The amount of the transaction is not disclosed. The proceeds from the deal were not credited to Severstal’s account. They will be frozen in an escrow account while the EU sanctions regime remains in place.

The main owner of Severstal Alexey Mordashov hit to the EU sanctions list on February 28, 2022. March 14 EU introduced a ban on the import of Russian steel. November 30, Mr. Mordashov informedthat Severstal lost $400 million due to arrests of Western warehouses and accounts.

“The EU sanctions against Alexey Mordashov, in fact, made it impossible for our distribution division to operate in Europe. Despite these restrictions, which we consider unreasonable and illegal, it is important for us that our colleagues from SIA Severstal Distribution keep their jobs, and the assets that we have been developing for many years continue to work,” Severstal said in a comment (quoted by Reuters ).

The General Directorate for Competition of the European Commission approved the sale of the assets of the Italian Marcegaglia by Severstal on April 5, 2023. Marcegaglia said that the deal will allow the company to strengthen its presence in Northern Europe and the Baltic countries, where it has not been present so far.

Read more in the publication “Kommersant” “Steel does not bend under sanctions”.

Maria Fedotova