Jun 16 2004
Ryerson Tull, Inc. and Arcelor SA today announced the signing of a definitive agreement under which Ryerson Tull will purchase from Arbed Americas, LLC (a subsidiary of Arcelor) the J&F Steel, LLC subsidiary. Ryerson Tull will purchase all of the equity interest in J&F Steel for approximately U.S. $55 million in cash subject to adjustments. The transaction is anticipated to close in the third quarter of 2004 following the completion of satisfactory due diligence and Hart Scott Rodino review.
J&F Steel is a carbon flat rolled processor with locations in Burns Harbor, Indiana; Jenison, Michigan; Memphis, Tennessee; and Middletown, Ohio. Following the acquisition, J&F would operate as part of RTCP (Ryerson Tull Coil Processing) division.
"J&F is a strategic fit with RTCP," stated Jay Gratz, executive vice president and CFO of Ryerson Tull and president of RTCP. "With its strong reputation in the marketplace for service and quality, J&F will expand our carbon flat rolled presence in geographies we have chosen to service and will provide a complementary customer base -- serving similar end markets with minimal customer overlap. Moreover, J&F's efficient facility in Burns Harbor may provide a site for possible relocation of RTCP's Chicago processing center at 111th Street."
In September 2003, RTCP announced plans to relocate its 111th Street coil processing facility to a site in Northwest Indiana/Southwest Michigan in order to be closer to its customer base and sources of supply in that area. Such a move would help RTCP service customers by enhancing processing capabilities, increasing operational efficiencies, and improving logistics with nearby mills. With the acquisition, RTCP will discuss with union officials the potential relocation of the 111th Street operations, at least in part, to J&F's Burns Harbor facility.
"This transaction is beneficial for both parties," stated Bruno Le Forestier, president and chief executive officer of Arcelor International America, LLC. "We are refocusing our activities on our core business while expanding our existing commercial relationship with Ryerson Tull."
"Following the costs associated with the possible relocation, we expect the acquisition to be additive to earnings," stated Gratz.
"We are excited about the expanded market presence and growth opportunities we will have as part of RTCP," added Tammy Graham, executive vice president of J&F.
Arcelor is the world's largest steel producer, with a turnover of 25.9 billion euros and shipments of 40.2 million tonnes in 2003. The Group employs 98,000 workers in more than 60 countries, and it is a major player in all its main markets: automotive, construction, household appliances, packaging, and general industry.
Ryerson Tull, Inc. is North America's leading distributor and processor of metals, with 2003 revenues of $2.2 billion. The company services customers through a network of service centres across the United States and in Canada, Mexico, and India.
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