Sale of Sparrows Point to E2 is taking longer than expected

November 13, 2007|By Allison Connolly | Allison Connolly,SUN REPORTER

The sale of the Sparrows Point steel mill won't close before the end of the month at the earliest, according to the head of the joint venture slated to take over the Baltimore County complex.

Craig T. Bouchard, chief executive of the investment group E2 Acquisition Corp., said yesterday that E2's $1.35 billion deal to buy Sparrows Point from Mittal Steel Co. NV, of the Netherlands, remains on track but is taking longer than expected because it is complex.

The joint venture is led by Chicago-based Esmark Inc., a metals distributor turned steelmaker. Bouchard, a co-founder of Esmark along with his brother, is chairman and chief executive of E2.

In an e-mail yesterday, Bouchard said most of the work is complete. He said Mittal has been "accommodating" and has allowed E2 access to the mill and its employees.

Sparrows Point is a key purchase for the nascent steelmaking company. Esmark surprised many with plans to simultaneously buy Sparrows Point and Wheeling-Pittsburgh Corp. in Wheeling, W.Va. Esmark took control of Wheeling-Pitt in a proxy fight last year.

Backed by investors and a supply contract with the world's largest iron-ore producer, the Bouchards have promised to expand production at both plants. Sparrows Point will feed steel slab to Wheeling-Pitt, which will become Esmark's primary steel-finishing facility.

Wheeling-Pitt shareholders are scheduled to vote on the merger with Esmark Nov. 27.

Mittal was forced by the U.S. Justice Department to sell Sparrows Point to satisfy antitrust concerns related to Mittal's $38 billion merger with Luxembourg-based Arcelor SA. E2 will be the plant's fourth owner in four years.

E2's other partners include the Brazilian mining company Cia Vale do Rio Doce (CVRD) and the Industrial Union of Donbass, a Ukrainian steel mill.

Sparrows Point employs 2,450 hourly and salaried workers and has the capacity to produce 3.5 million tons of steel a year.

allison.connolly@baltsun.com

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