Steel tycoon Mittal ordered to sell US steel plant
US authorities has been ordered to sell a steel plant owned by the Indian steel magnate near Baltimore.india Updated:
A steel plant owned by Indian steel magnate Lakshmi Mittal's group has been ordered to be sold by US authorities to preserve competition in the eastern US tin mill market.
Once considered the world's largest steel maker, the 116-year-old Sparrows Point plant near Baltimore in Maryland, is currently owned by Mittal Steel's US arm.
The US Justice Department said Tuesday that its sale would remedy antitrust concerns about competition arising from the Mittal's recent $33 billion acquisition of Arcelor SA, to create the world's largest steel maker.
<b1>The sale order attracted attention from several possible buyers with The Wall Street Journal reporting that bidders could include JSW Steel Ltd or Ispat Industries Ltd, both based in India, or Russia's Evraz Group or OAO Severstal Group, both of which already own US operations.
China's Wuhan Steel Corp and Anshan Iron & Steel Group Corp. have cash and are considering expanding, the newspaper said. And Brazil's Companhia Siderurgica Nacional, which failed in its attempt to buy Wheeling-Pittsburgh Corp, was also cited as a potential buyer.
The Justice Department order came after Arcelor Mittal's sale of Canadian steelmaker Dofasco to Germany's ThyssenKrupp was sidelined. ThyssenKrupp had hoped the decision might help it secure control of Dofasco.
The Justice Department had said that if the Dofasco sale was not possible, Mittal would have to sell either Sparrows Point or Weirton, a mill in Weirton, West Virginia.
It said that the Sparrows Point sale was preferable to selling Weirton because it is an integrated facility and unlike Weirton, would not have to develop new sources of supply when it is separated from Mittal Steel.
With an annual production capacity of more than 500,000 tons, the profitable and diversified facility that produces the steel slabs used in the manufacture of tin mill products.
"With the divestiture of Sparrows Point, competition in the market for tin mill products in the eastern United States will be preserved," said Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division.
The company last month announced plans to sell Weirton to privately held Esmark if the Justice Department approves.
Prior to Mittal's acquisition of Arcelor, two large firms - Mittal and one other integrated steel producer - accounted for more than 74 per cent of all tin mill product sales in the eastern United States, the department said.
Prior to the merger, Arcelor, together with its subsidiary Dofasco, which operates a large integrated mill in Ontario, provided a significant competitive constraint on these two firms.
By removing those constraints on anticompetitive pricing, the acquisition likely would have resulted in price increases of tin mill products to can manufacturers and other customers in the eastern United States, it said.
First Published: Feb 22, 2007 12:27 IST