Severstal Proposes To Acquire Esmark Incorporated For $17.00 Per Share In Cash

MOSCOW, May 20 /PRNewswire-FirstCall/ -- OAO Severstal (LSE: SVST; RTS:
CHMF; "Severstal"), one of the world's leading metals and mining companies,
today announced that it has made a proposal to the Esmark Incorporated
(Nasdaq: ESMK; "Esmark") Board of Directors to acquire all of the outstanding
shares of common stock of Esmark for $17.00 per share in cash.
Severstal is best positioned to optimize the value of Esmark by creating
complementary product lines, geographical alignment and operational synergies.
Further, Severstal has developed a highly credible restructuring plan designed
to derive maximum value from Esmark, including a 5-year capital improvement
plan that carries the full support of the United Steelworkers (the "USW").
Together, the combined company will become one of the North American leaders
in flat rolled steel products.
Severstal's proposal follows the April 30, 2008 announcement by Esmark of
its agreement to be acquired by Essar Steel Holdings Limited and the
May 16, 2008 announcement by the USW of its rejection of such a transaction.
As part of its announcement, the USW demanded that Esmark repudiate the
transaction agreements with Essar Steel, which were entered into in violation
of the USW's right to bid provisions contained in its collective bargaining
agreement with Esmark. The USW has further indicated that under another
section of its labor agreement -- the "successorship" clause -- Esmark and
Essar Steel cannot close their proposed transaction unless Essar Steel enters
into a new labor agreement with the USW. The USW stated in its announcement
that it will use such power to block the Essar Steel transaction.
In contrast to the proposed Essar Steel transaction, Severstal's proposal
has the full and enthusiastic support of the USW. Severstal and the USW have
also entered into an agreement that satisfies the successorship clause of the
labor agreement.
Gregory Mason, CEO of Severstal International and COO of OAO Severstal,
stated, "While we hope to work together with Esmark and its board of directors
to negotiate a mutually acceptable merger agreement, we believe that it is
critical to give Esmark's stockholders a chance to decide for themselves and
that they will find Severstal's proposal much more compelling than the Essar
Steel transaction."
Severstal indicated in its letter that its proposal could be consummated
within 40 days after entering into a merger agreement with Esmark.
Merrill Lynch is acting as lead financial advisor, Citi is acting as
financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as
legal counsel, to Severstal. Set forth below is the text of Severstal's
letter to Esmark's board.

* * * * *

May 20, 2008
Board of Directors
Esmark Incorporated
1135 Market Street
Wheeling, WV 26003
Attention: Mr. James Bouchard
Chairman and Chief Executive Officer

Dear Mr. Bouchard:

While we were disappointed to learn of the acquisition and financing
agreements that Esmark Incorporated and Essar Steel Holdings Limited announced
on April 30, 2008, we appreciate being invited to continue to consider the
acquisition of Esmark. Therefore, we would like to reiterate our strong
interest in acquiring Esmark and believe our proposal set forth below is so
compelling that it is important to make it public.
Severstal is best positioned to strengthen and grow Esmark's current
assets that fit well with our North American operations. The addition of
Esmark to Severstal's North American business will further unlock the
synergistic opportunities between our facilities in Dearborn, MI, Sparrows
Point, MD, and SeverCorr in Columbus, MS. For instance, the supply of slabs
from Sparrows Point could substantially increase the utilization of Esmark's
hot strip mill, while the supply of wide hot band from Esmark to Dearborn
could substantially broaden the customer value proposition of the combined
companies. The potential synergies could be even further enhanced upon
successful closing of our recently announced acquisition of WCI in Warren, OH,
pending necessary regulatory approvals.
Our restructuring plan for Esmark is based on Severstal's extensive
experience in the industry, which combined with the United Steelworkers' (the
"USW") support, makes us best suited to unlock the potential of Esmark's
current operations. This acquisition solidifies our position as the fourth
largest steel producer in the US by raising Severstal's current US capacity to
11.3 million tonnes per year. It further improves our product capabilities
and brings greater opportunities for increased profitability, thus enhancing
value to the benefit of all stakeholders.
We propose to acquire all of the outstanding shares of common stock of
Esmark for $17.00 per share in cash. In addition, we are also prepared, if
necessary, to enter into interim liquidity substitute financing arrangements
upon entering into a mutually acceptable definitive merger agreement.
This proposed transaction is not subject to any financing contingency.
Consummation of the transaction would be subject only to customary conditions,
including receipt of necessary regulatory approvals.
In stark contrast to the USW's unequivocal position regarding your
proposed transaction with Essar Steel, our proposal has the full and
enthusiastic support of the USW, and Severstal and the USW have entered into
an agreement that satisfies the successorship clause of your collective
bargaining agreement. We also have been informed by the USW that it will
waive its right to bid provisions in the collective bargaining agreement with
respect to our proposal.
We believe our proposal could be consummated within 40 days after entering
into a mutually satisfactory merger agreement. As you know, we had
substantially finalized the terms of such an agreement, as well as the terms
of interim Esmark liquidity financing arrangements, on April 29, 2008.
Given the USW's support of our proposal, its rejection of the proposed
Essar Steel transaction and the market reaction to the USW's position, and
even assuming the enforceability and viability of the Essar Steel proposal
(which we believe is untenable), our proposal clearly constitutes a "superior
proposal" under the publicly available terms of the Essar Steel proposal.
In addition, we would strongly encourage you to make available to us or
file publicly the actual acquisition agreements entered into with Essar Steel
as soon as possible.
We look forward to hearing from you and concluding a transaction
expeditiously.

Sincerely,

/s/ Gregory Mason
Gregory Mason
CEO Severstal International
COO OAO Severstal

About Severstal:
OAO Severstal is an international metals and mining company with a listing
on the Russian Trading System and the London Stock Exchange. Incorporated in
1993, the company focuses on high value added and unique niche products and
has a successful track record of acquiring and integrating high-quality assets
in North America and Europe. Severstal owns mining assets in Russia, thus
securing its supplies of raw materials. In 2007, Severstal produced 17.5
million tons of steel. Revenues were $15.2 billion and EBITDA was $3.7
billion. EPS was $1.92.
Forward Looking Statements:
This press release may contain projections and other forward-looking
statements regarding future events or the future financial performance of OAO
Severstal (Severstal). Forward looking statements are identified by terms such
as "expect," "believe," "anticipate," "estimate," "intend," "will," "could,"
"may" or "might", the negative of such terms, or other similar expressions.
Severstal wishes to caution you that these statements are only predictions and
that actual events or results may differ materially. Severstal does not intend
to update these statements to reflect events and circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. Factors
that could cause the actual results to differ materially from those contained
in projections or forward-looking statements of Severstal may include, among
others, general economic conditions in the markets in which Severstal
operates, the competitive environment in, and risks associated with operating
in, such markets, market change in the steel and mining industries, as well as
many other risks affecting Severstal and its operations.
For further information:

Severstal
Dmitry Druzhinin, Investor Relations
Olga Antonova, Public Relations
+7 495 540 7766

Taylor Rafferty

Michael Henson
+1 212 889 4350 (o)
+1 917 902 0767 (m)

John Dudzinsky
+1 212 889 4350 (o)
+1 646 715 2980 (m)

SOURCE OAO Severstal

Dmitry Druzhinin, Investor Relations, or Olga Antonova, Public Relations, both
of Severstal, +7-495-540-7766; or Michael Henson, +1-212-889-4350 (o), or
+1-917-902-0767 (m), or John Dudzinsky, +1-212-889-4350 (o), or
+1-646-715-2980 (m), both of Taylor Rafferty, for OAO Severstal