AK Steel said it signed an agreement to acquire Severstal North America’s integrated steelmaking assets located in Dearborn, MI, for $700 million in cash. The acquisition also includes a cokemaking facility and interests in three joint ventures that process flat-rolled steel products.

The acquisition is supported by a fully committed bridge financing facility from Credit Suisse. Credit Suisse is acting as financial advisor to AK Steel, and Weil, Gotshal & Manges is serving as its legal advisor.

The Dearborn plant, which produces high-quality, flat-rolled steels primarily for the automotive, construction and appliance markets, completed a large-scale modernization campaign in 2011. During the campaign, major capital was invested in new state-of-the-art equipment and various operational improvements. The Dearborn facility is strategically located in close proximity to many of AK Steel’s customers, and the assets at the steel plant and the other acquired facilities complement AK Steel’s existing carbon steel operations.

“The acquisition of Severstal Dearborn allows us to grow our business profitability and better serve our customers,” said James L. Wainscott, Chairman, president and CEO of AK Steel. “It furthers our automotive strategy and strengthens our carbon steelmaking footprint. It also combines great employees at Dearborn with great employees at AK Steel to strengthen a terrific company that is better able to compete, and to win, in the global steel marketplace. We welcome the employees of Dearborn to AK Steel. The acquisition also increases AK Steel’s operational flexibility and enables significant cost-based synergies. In addition to operational and productivity enhancements, the acquisition will create purchasing, transportation and overhead cost savings. We expect the transaction to be immediately accretive to our earnings and create significant long-term value for AK Steel, our employees, customers and shareholders. The company anticipates annual cost-based synergies of approximately $50 million, with approximately $25 million realized in the first full year following the closing of the acquisition.”

AK Steel intends to finance the acquisition with a combination of debt and equity securities and remains committed to enhancing its credit profile.