Severstal Acquires Sparrows Point

OAO Severstal (Moscow, Russia) one of the world?s leading metals and mining companies, has reached an agreement to purchase Sparrows Point, a fully-integrated steel mill based in Baltimore, Maryland. Sparrows Point, currently owned by ArcelorMittal, is being sold by Joseph G. Krauss, Divestiture Trustee, as required by the Final Judgment entered on May 23, 2007 in the United States District Court for the District of Columbia (the ?District Court?) in the matter known as United States v. Mittal Steel Company N.V., to settle a complaint filed by the United States Department of Justice following the merger agreement between Mittal Steel and Arcelor SA in 2006.

Severstal has agreed to acquire Sparrows Point LLC for an all cash purchase price of US$810 million. The transaction reflects a significant strategic opportunity to add complementary assets
and scale to Severstal?s existing U.S. business. Sparrows Point has a capacity of 3.6 million metric tons of crude steel and shipped 2.3 million metric tons of finished steel products in 2007; it is the only integrated producer of flat rolled steel on the U.S. East Coast and is a major North American supplier of tin mill products.

Severstal expects to realize business improvements and synergies at Sparrows Point in
conjunction with a five-year investment program at the plant. The transaction is expected to be
accretive in year one based on current projections of costs and prices and offers significant
value creation potential. Additionally, the Company expects substantial synergies with its
current U.S. operations in Dearborn, Michigan and Columbus, Mississippi. With the addition of
Sparrows Point, Severstal will also improve its distribution channels and increase its geographic
reach as the plant provides direct ocean access and proximity to a number of major U.S.
railways and highways.

Alexei Mordashov, CEO of Severstal, commented, ?With Sparrows Point, Severstal brings into
its U.S. portfolio an asset with significant existing value as well as unlocked growth potential.
This acquisition presents us with an opportunity to enhance productivity at Sparrows Point
through our high standards of operational performance and will benefit our existing U.S.
businesses. We expect to realize synergies in Sparrows Point and with SNA that will fuel
increased production and profitability. We remain committed to growth in North America and
believe in the long-term promise of the U.S. market; we?re confident that this acquisition will
create value for our shareholders while strengthening our U.S. platform as a whole.?
Severstal and the United Steel Workers have agreed to enter into a collective bargaining
agreement, reinforcing the Company?s already strong relationship with organized labor.
The acquisition is subject to customary closing conditions, including approval by the United
States Department of Justice, and is expected to close in 2Q08.

Merrill Lynch & Co. is acting as exclusive financial advisor to Severstal and rendered a fairness opinion to the Board of Directors regarding this transaction. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Severstal. OAO SeverStal produced 17.5 million tons of steel in 2007. Revenues were $15.2 billion and EBITDA was $3.7 billion. EPS was $1.92.