STEEL INDUSTRY Dutch company acquires U.S.-based ISG with deal
The combined companies would employ 165,000 people.
AMSTERDAM, Netherlands (AP) -- A privately owned Dutch steelmaker headed by billionaire Lakshmi Mittal is buying U.S.-based International Steel Group Inc. for about $4.5 billion in cash and stock in a deal that would make it one of the largest steel companies in the world.
The combined company under the deal announced today would have operations in 14 countries on four continents, generate revenue of more than $30 billion this year and employ 165,000 people. ISG operates a Warren coke plant, which has about 140 employees.
The combination comes amid widespread expectations for industry consolidation as worldwide production has outstripped demand.
As part of the transaction, privately owned steelmaker LNM Group would merge its two main divisions, Ispat International NV and LNM Holdings NV, and then take over Richfield, Ohio-based ISG, which has grown in three years under former investment banker Wilbur Ross into one of the biggest U.S. steel producers by acquiring money-losing mills out of bankruptcy and making them more efficient.
Rotterdam-based Ispat will first buy the Antilles-based LNM Holdings NV for $13.3 billion in stock. It then will buy ISG, which has scooped up the steel-making assets of fallen giants such as LTV, Acme Steel, Bethlehem Steel and Weirton Steel. Ross will be on the board of the new company.
Based in Rotterdam
The combined group will be based in Rotterdam under the name Mittal Steel Company NV, and seek a dual listing on the New York Stock Exchange and Euronext.
LNM Group will retain control of Mittal Steel after the deal, a spokesman said.
The new company is offering ISG shareholders a combination of $42 in cash and stock for each ISG share. That is a 41.5 percent premium over ISG's closing share price of $29.68 a share on Friday.