Metinvest, the steel conglomerate controlled by Ukraine’s richest man, billionaire Rinat Akhmetov, said on Thursday it had acquired United Coal Company, a coking coal producer based in West Virginia in a deal estimated to be worth at least $800m.
The value of the deal was not announced. But in a note to investors, Kyiv-based investment bank Dragon Capital estimated that Metinvest paid between $800 million and $1 billion for UCC, which accounts for 4 percent of coking coal output in the U.S.
Dragon said the acquisition will help Metinvest cut down on consumption of natural gas in the steel production cycle, using coking and thermal coal instead. Metinvest is one of Ukraine’s largest steel groups in terms of production, and Ukraine’s most vertically-integrated. In addition to owning steel mills in Ukraine, Italy and the UK, the group also owns ore and coal mines.
Akhmetov owns a majority stake in Metinvest. Smart Group, owned by Russian businessman Vadim Novinsky along with partners, holds a minority stake in Metinvest.
