Mittal Takes Big Bite Out of Canadian Steel Industry

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Researched by Industrialinfo.com (Industrial Info Resources; Houston, Texas). Mittal Steel Company NV (NYSE:MT) (Rotterdam, Netherlands) seems to have an insatiable appetite for everybody’s steel. The company has recently completed its acquisition of three subsidiaries of Stelco, Incorporated (TSX:CA:STE.A )(Hamilton, Ontario), one of Canada’s largest steelmakers, for $30 million and $28 million in debt.

The former Stelco subsidiaries are Norambar, Incorporated (formerly Stelco-McMaster, Limitee), with a steel billet and bar mill in Contrecoeur, Quebec, and ferrous and non-ferrous scrap metal recuperation and processing facilities (Fers et Métaux Recyclés, Limitée of Laprairie, Québec, and Cyclomet of Scoudouc, New Brunswick); Stelfil, Limitée, a steel wire mill in Lachine, Quebec, and Stelwire, Limited, another steel wire mill in Hamilton, Ontario.

Norambar produces 625,000 tons of steel billet and 435,000 tons of steel bar a year. Between Stelfil and Stelwire, Mittal will gain 250,000 tons of steel wire production annually.

Stelco had only recently sold its AltaSteel, Limited (Edmonton, Alberta) to Moly Cop Steel, Incorporated (Kamloops, British Columbia), an affiliate of Scaw International Sarl (South Africa), under its reorganization process.

Mittal Steel, the world’s largest steelmaker, produces about 2.5 million tons of steel annually from its global locations. Since its acquisition of International Steel Group in 2005, it has gobbled up several Eastern European and Russian formerly state-owned mills and is presently attempting a hostile takeover of Europe’s largest steelmaker, Arcelor S.A. (Frankfurt:DE:529385 ) (Luxembourg), since Arcelor’s board flatly dubbed Mittal’s $22.7 billion cash offer "inadequate". Arcelor was recently declared the successful bidder for another of Canada’s largest steelmakers, Dofasco (OTC:DFS ) (Hamilton, Ontario), in a protracted and heated bidding war with ThyssenKrupp AG (Frankfurt:DE:750000 ) (Duesseldorf, Germany). However, if Lakshmi Mittal is successful in his bid for Arcelor, he has said he would sell Dofasco to ThyssenKrupp for an attractive price, so with the $215 million break fee ThyssenKrupp got from termination of the Dofasco bidding, the German steelmaker will make out handsomely.

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