National Steel have announced that they have signed an agreement to sell all of their steel making and finishing assets to AK Steel for $1.125 billion. This sale price includes $925 million in cash and approximately $200 million in assumed liabilities. They expect to close the deal in the second quarter of 2003.
This deal follows on from AK Steel’s $1.025 billion bid made on January 23. These were also subsequent to an asset purchase agreement signed with US Steel Corp to acquire National Steels assets for $950 million on January 9. Apart from the purchase price, the main difference between the bids was that AK Steel’s bid included the purchase of National Steel’s iron ore pellet operation. Directors felt that the AK Steel bid offered a better solution for stakeholders, employees, customers and those involved with the operation.
The purchase will include:
- Integrated steel plants in Michigan and Illinois
- Finishing facility in Indiana
- National Steel’s share in the Double G Joint venture in Mississippi
- Pellet operations in Minnesota
- Various administrative centres
The purchase of National Steel is still subject to approval by the federal bankruptcy court as National Steel is operating under chapter 11 bankruptcy protection. It is also subject to the agreement and execution of a suitable enterprise bargaining agreement with the united Steelworkers of America relating to National Steel employees who would become AK Steel employees.
While National Steel are confident the deal with AK Steel will go ahead, they are also actively pursuing their own plans to emerge from Chapter 11 Bankruptcy independently.
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