US Steel to buy Stelco for about $1.1 billion
Tuesday, 28 August 2007
TORONTO/NEW YORK, Aug 27 (Reuters): US Steel Corporation is to acquire Stelco Inc for about US$1.10 billion to strengthen its position as a supplier of flat-rolled steel products in North America, the companies said.
Stelco, the last big Canadian-owned steelmaker to fall into foreign hands, had put itself up for sale in June after a wave of takeovers within the Canadian steel industry.
US Steel will acquire Stelco for C$38.50 per share, amounting to about $1.10 billion, based on about 30 million fully diluted shares, according to the companies. They announced the deal late Sunday night.
Hamilton, Ontario-based Stelco, which emerged from bankruptcy protection last year, had about $760 million of net debt on its balance sheet as of June 30, the companies said.
Stelco stock closed at C$26.93 Friday on the Toronto Stock Exchange, and John Hughes, steels, mining and metals analyst at Desjardins Securities, said shareholders should be happy with the C$38.50 cash-per-share offer.
"It seems to be the theme across the materials group in terms of acquisitions ... with steel producers going for more strategic prices than economic prices over the longer term," he said.
Shareholders owning more than 76 per cent of Stelco's shares have agreed to support the deal, the companies said.
Stelco, the last big Canadian-owned steelmaker to fall into foreign hands, had put itself up for sale in June after a wave of takeovers within the Canadian steel industry.
US Steel will acquire Stelco for C$38.50 per share, amounting to about $1.10 billion, based on about 30 million fully diluted shares, according to the companies. They announced the deal late Sunday night.
Hamilton, Ontario-based Stelco, which emerged from bankruptcy protection last year, had about $760 million of net debt on its balance sheet as of June 30, the companies said.
Stelco stock closed at C$26.93 Friday on the Toronto Stock Exchange, and John Hughes, steels, mining and metals analyst at Desjardins Securities, said shareholders should be happy with the C$38.50 cash-per-share offer.
"It seems to be the theme across the materials group in terms of acquisitions ... with steel producers going for more strategic prices than economic prices over the longer term," he said.
Shareholders owning more than 76 per cent of Stelco's shares have agreed to support the deal, the companies said.