Mumbai: 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.

Chicago-based 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.

Esmark chairman James Bouchard said the company and its subsidiary Wheeling-Pitt will jointly lead the acquisition group.

The 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.

Mittal 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.

Mittal said it would announce more details after receiving regulatory approval of the sale, which is expected to close by October 31.

The 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.

The acquisition would make Esmark a medium-size steelmaker by more than doubling its annual capacity to about 6 million tonnes, analysts said.

Mittal 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.

The 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.

Esmark 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.

The 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 change.