A multi-national group led by steel distributor Esmark Inc. will acquire Mittal
Steel''s Sparrows Point mill near Baltimore, US, clearing the way for the steel
giant to complete its acquisition of Arcelor SA.
Esmark has formed a joint venture - called E2 Acquisition Corp - with Brazilian
iron-ore producer Companhia Vale do Rio Doce and Ukrainian steelmaker Industrial
Union of Donbass Corp for the acquisition. Other investors include a European
steelmaker and a South African company, which he did not name.
chairman James Bouchard said the company and its subsidiary Wheeling-Pitt will
jointly lead the acquisition group.
deal, valued at $1.35 billion, including debt and equity, is subject to approval
by the US justice department and is expected to be finalised in 90 days, reports
quoting sources close to the transaction said.
is selling the Maryland plant to comply with US antitrust rules and clear the
way for its planned $41 billion acquisition of the Luxembourg-based Arcelor SA,
which would create the world''s largest steelmaker.
said it would announce more details after receiving regulatory approval of the
sale, which is expected to close by October 31.
Sparrows Point plant can generate 3.9 million tonnes of raw steel every year and
with its location on the Chesapeake Bay, it is the only fully integrated US steel
mill with direct ocean access. It also has access to rail and highway shipping.
acquisition would make Esmark a medium-size steelmaker by more than doubling its
annual capacity to about 6 million tonnes, analysts said.
bought Sparrows Point in 2005 and continued cost cutting by awarding work to its
most efficient plants. As a result, Sparrows Point swung from annual losses of
$100 million under Bethlehem Steel to a $100 million a year profit under Mittal.
118-year-old steel mill employs 2,450 hourly and salaried workers and is one of
the few remaining links to the region''s blue-collar roots. Its high-paying manufacturing
jobs are a contrast to companies like General Motors, Procter & Gamble, Black
& Decker and others that have curtailed employment or reduced investments.
plans to triple the company''s steel distribution network within two years of closing
the Wheeling-Pittsburgh deal. Acquiring Sparrows Point would enable Esmark to
feed Wheeling-Pittsburgh with slab steel from the Maryland mill.
United Steelworkers, which represents about 2,500 mill workers and about 15,000
retirees, have extended support to the deal. The union must sign off on the ownership