updated 11/20/2006 7:56:32 AM ET 2006-11-20T12:56:32

Russia's biggest steelmaker, Evraz Group SA, said Monday it has agreed to buy Oregon Steel Mills Inc. for $2.3 billion in cash.

In a statement posted on its Web site, the company said it had signed an agreement under which Evraz will acquire Portland, Ore.-based Oregon Steel for $63.25 per share in cash.

That price represents a premium of 7 percent to Oregon Steel's closing stock price Friday of $58.96 on the New York Stock Exchange. Evraz said it's also a 22.3 percent premium to Oregon Steel's three-month average stock price.

Oregon Steel's board of directors has unanimously recommended the company's shareholders accept the offer.

The deal also needs to be approved by antitrust and other regulators, the statement said.

The combined company will produce more than 16.8 million metric tons of crude steel a year and will have more than 17.4 million tons of steel shipments in 2006.

Evraz announced in April that it would purchase a 73 percent stake in Danbury, Conn.-based Strategic Minerals Corp. for $110 million. The deal was approved by European Union regulators in August.

In June, a 41 percent stake in Evraz was acquired by billionaire tycoon Roman Abramovich.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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