Posted on: Tuesday, October 26, 2004

Steel deal will forge global clout

Associated Press

AMSTERDAM, Netherlands — Steel tycoon Lakshmi Mittal has announced plans to pay $4.5 billion in cash and stock for U.S. steelmaker International Steel Group Inc., which had been cobbled together by one-time investment banker Wilbur Ross Jr. from mills whose parents landed in bankruptcy court.

The takeover and the consolidation of two Mittal-controlled firms also announced yesterday will create a global metals mammoth with anticipated 2004 sales of $31.8 billion, production capacity of 70 million tons of steel and 165,000 employees, rivaling the world's largest steel and mining conglomerates.

Mittal, a native of India who lives in London, has spent years acquiring steelmaking plants in locations ranging from the Czech Republic to Mexico, much as ISG chairman Ross has since 2002, scooping up the assets of fallen U.S. giants such as LTV, Acme Steel, Bethlehem Steel and Weirton Steel.

Mittal Steel will have a particular advantage in the United States, where it will control about 40 percent of the flat-rolled steel market, said analyst Chris Olin of Longbow Research.