Sep 11 2007
The world's leading steel manufacturer, ArcelorMittal, announced today that the company has received approval from the United States Department of Justice (DOJ) to sell its Sparrows Point facility. A joint venture entity sponsored by Esmark Incorporated and Wheeling-Pittsburgh Corporation, with participation by industry and institutional investors, will purchase the facility for an enterprise value of US$1.35 billion. The transaction is expected to close in October of this year and is still pending approval from the United Steelworkers (USW).
Under the terms of the agreement, ArcelorMittal will divest the related railroad, intellectual property and other assets associated with the Sparrows Point facility as part of the transaction. The Sparrows Point facility in 2006 generated an EBITDA of US$143 million, or US$50 per shipped ton. These results include the impact of Profit Sharing and VEBA of US$30 million.
"We are pleased that the DOJ has approved the sale of the Sparrows Point facility. This transaction will permit ArcelorMittal to close the disposal program related to our merger and reinforce our already solid financial structure," Aditya Mittal, ArcelorMittal's CFO and head of Flat Carbon Americas, commented.