ShareThis Page
Russians to buy U.S. steel assets |

Russians to buy U.S. steel assets

| Saturday, March 22, 2008 12:00 a.m

Two Russian steel companies are buying more of the nation’s steel assets in separate deals — the former Bethlehem Steel Co. mill in Sparrows Point, Md., and the former Koppel Steel Co. plants in Beaver County.

Russian steelmaker OAO Severstal, run by billionaire Alexei Modashov, said Friday it reached an agreement to buy the Sparrows Point plant from ArcelorMittal for $810 million. ArcelorMittal is run by billionaire Lakshmi Mittal.

In the other Russian acquisition, the former Koppel Steel plants in Koppel and Ambridge were part of the deal by Svenskt Stal AB of Sweden to sell its Ipsco North American tubular business to Evraz Group SA of Moscow for $4.025 billion, SSAB said last week.

That Russian steel company, in turn, plans to retain most of the Canadian mills but sell most of the U.S. portion of the business to Russia’s OAO TMK, the world’s second-largest producer of steel pipes and tubes. It was not known if the Koppel Steel plants were part of the sale by Evraz.

The local Koppel Steel plants, which were part of the Babcock & Wilcox Co. before closing in 1988, make tubing for the oil and natural gas industries.

SSAB had acquired Ipsco’s North American tubular business in May 2007, when it bought the Canadian steelmaker Ipsco for $7.7 billion. Ipsco, in turn, had spent $1.46 billion to buy the U.S. tubular plants, including Koppel’s facilities, from NS Group Inc. of Newport, Ky., in September 2006.

Neither officials at the Koppel Steel plants, nor Rick Galiano, president of United Steelworkers Local 9305, which represents Koppel’s production workers, could be reached for comment.

ArcelorMittal, formed by a merger of Mittal Steel and Arcelor SA of Luxembourg, agreed to sell the Sparrows Point plant to resolve U.S. Department of Justice antitrust concerns, but a $1.35 billion deal fell through in December.

The $1.35 billion deal to sell the plant to E2 Acquisition Corp., an international investment group led by Esmark Inc., of Chicago Heights, Ill., collapsed in December due to what Mittal said was E2’s inability to secure financing.

E2 Acquisition Chief Executive Craig Bouchard, who was president of Esmark’s Wheeling-Pittsburgh Steel division, had said earlier this year the investors intended to regroup and prepare another bid. Neither Craig Bouchard, nor his brother James, CEO of Esmark, could be reached for comment.

Esmark has said it is reviewing Wheeling-Pittsburgh Steel’s operations, with the intention to reduce costs. James Bouchard said earlier this month no decision has been made on the future of Wheeling-Pitt’s Allenport plant in Washington County.

Bill Kinney, president of the United Steelworkers Local 1187 at the plant, could not be reached for comment.

Charles Bradford, a steel industry analyst with Bradford/Soleil Securities, said the sale price of Sparrows Point was in line with his valuation of the plant.

“It’s pretty clear the last time the people who won the bid couldn’t finance it,” Bradford said. Severstal has sufficient money and should not have any problem paying for the plant, Bradford said.

In Washington, Gina Talamona, a spokeswoman for the U.S. Department of Justice, said its antitrust division “expects to conduct a prompt review of the agreement and the proposed acquirer.”

Categories: News
TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.