Friday, September 26, 2008

Mechel OAO Announces the Acquisition of HBL Holdings

Moscow, Russia – September 24, 2008 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces the acquisition of a 100% stake in HBL Holding GmbH by its Mechel Service OOO service and sales subsidiary.

The acquisition is consistent with Mechel Service OOO’s continued implementation of its program of expanding its sales network, enhancing and extending range of its services, and enlarging its client base. Ownership of the shares in HBL Holding shall pass to the buyer following the completion of all necessary legal and financial procedures.

HBL Holding, founded in 1976, is a group of German companies in the field of steel trading and distribution with a primary focus on of its activities in North Rhine-Westphalia, Bremen and the Eastern German federal states. In addition to steel wholesaling activities, HBL also processes steel parts according to customer requirements, and delivers products to its clients on a fast and reliable basis.

HBL Holding integrates eight service and trading companies in Germany. The main competitive advantage of the HBL Group is the wide range of its products: construction and tool steel, various rolled products for construction, various kinds of stainless steel pipes, steel sheets, including stainless steel sheets, and aluminum, brass and copper sections. Other advantages of the group include high value-added services surrounding steel wholesaling, and fast delivery of standard steel products due to an effective warehousing system. In addition, HBL offers sophisticated, customer-tailored services in the area of prefabrication and processing of metals, and precision (thermal) cutting such as plasma, laser, water jet and autogenous cutting. Major HBL customers include European companies in machinery and automotive manufacturing, and the construction industry.

“HBL Group is well positioned in its market segment and shows sustainable profitability and solid growth prospects. This purchase provides Mechel with greater access to attractive European markets and a more direct relationship to the users of our products. A wide range of available services and products and a group-wide logistics system enables HBL to offer utmost flexibility and just-in-time deliveries on short notice. The acquisition is the continuation of Mechel Service’s program aimed at entering the market of custom-tailored high margin steel products,” Mechel Management OOO Chief Executive Officer Vladimir Polin commented.

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