NEW DELHI: In yet another acquisition in the steel sector involving Indians, the Essar Group, promoted by the Ruias, has finalised a deal to buy Algoma Steel of Canada for a consideration of about $1.58 billion.

The all-cash transaction is the third such in the recent past, coming close on the heels of NRI business tycoon Lakshmi Mittal's takeover of European steel giant Arcelor in 2006 followed by the acquisition of the U.K.-based Corus Group by the Tata Group earlier this year.

According to Essar Group Chairman, Shashi Ruia, Algoma, specialising in the manufacture of steel sheets for the automotive industry, will provide Essar with an excellent platform for the Canadian and North American markets.

The completion of the buy-out transaction worth Canadian $1.8 billion by June this year is expected to pave the way for Essar's global expansion plans as the private sector steel major has also inked a deal with two Vietnamese firms in February to build a $527-million hot strip mill.

For Algoma Steel, an Ontario-based integrated producer with steel shipments of 2.4 million tonnes in 2006 and a revenue of Canadian $1.9 billion, Essar's offer price of Canadian $56 a share marks a 48 per cent premium to Algoma's stock price for the 20-day period ended February 14 when Algoma confirmed that it was negotiating on a potential transaction.

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