Esmark Inc to buy Mittal's Maryland plant
The deal would pave the way for the steel giant to complete its acquisition of Arcelor SA and become the world's top steelmaker.business Updated: Aug 03, 2007 13:23 IST
Chicago based Esmark Inc will buy the Mittal Steel Co's Sparrows Point plant in Maryland, paving the way for the steel giant to complete its acquisition of Arcelor SA and become the world's top steelmaker.
Esmark Inc has entered into a joint venture with Brazilian iron-ore producer Companhia Vale do Rio Doce and Ukrainian steelmeker Industrial Union of Donbass Corp to purchase the plant.
The deal, subject to approval by the Justice Department, is expected to be finalised in 90 days and the venture would be called E2 Acquisition Corp, a media report said on Friday.
Price of the deal was not disclosed but a person familiar with the transaction valued it at USD 1.35 billion including debt and equity, the Wall Street Journal reported.
The complex deal is another example of foreign producers entering into joint ventures with US partners or building mills, such as Germany's ThyssenKrupp AG and its plant under construction in Alabama, in hopes of capturing a piece of the strong US steel market, the report said.
Mittal, already the world's largest steelmaker by output, was under a Justice Department mandate to sell the 118-year-old plant in order to alleviate antitrust concerns before acquiring the Luxembourg-based Arcelor.
If the newly merged steel company were allowed to keep the plant, it would have had an unfair competitive advantage in the tin-plate steel market, the Justice Department said.