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NEW YORK - US Steel has agreed to acquire Stelco for US$1.1 billion ($1.56 billion), bagging the last big Canadian-owned steelmaker and strengthening its position in flat-rolled steel products in North America.
Chief executive John Surma said the deal would make US Steel the world's fifth-largest steelmaker.
He added that the deal, expected to close in the fourth quarter, would not preclude US Steel from making further acquisitions. In June, the company completed the US$2.1 billion acquisition of tubular steelmaker Lone Star Technologies.
"I don't think we're going to put up the stop sign - this is a very dynamic industry," he told Wall Street analysts on a conference call.
Stelco emerged from bankruptcy protection last year and put itself up for sale in June after a wave of foreign takeovers in the industry.
Pittsburgh-based US Steel, which itself was a subject of takeover talk this year before giant German conglomerate ThyssenKrupp denied an approach, said it would buy Stelco for C$38.50 per share, a 43 per cent premium over the company's closing stock price of C$26.93 on Friday.
US Steel would also pay down the majority of Hamilton, Ontario-based Stelco's debt, which was about US$760 million as of June 30.
Shareholders owning more than 76 per cent of Stelco's shares had agreed to support the deal.
Surma said that in addition to the shareholder support, the steelworkers' unions also backed the deal. "I can say the steelworkers approve of our transaction and support it. It's full steam ahead."
- Reuters
