Continuing the consolidation of the nation's steelmaking industry, U.S. Steel Corp. said it has signed an agreement to acquire the production and finishing assets of National Steel Corp., which has been operating since last March under Chapter 11 of the bankruptcy code. The transaction, announced Jan. 9, is valued at $950 million.

National's Portage, Ind.,
complex among those U.S. Steel would acquire
(Photo courtesy of National Steel Corp.)

Pittsburgh-based U.S. Steel says the purchase price includes $650 million in cash, $100 million in U.S. Steel common stock and assumption of about $200 million of National Steel liabilities. U.S. Steel would not assume liability for pensions or benefits for National Steel's retirees.

Thomas J. Usher, U.S. Steel's Chairman, says, "We are excited about this deal....We think this really provides opportunities for us to grow profitably."

National Steel's construction markets include residential roofing, residential and commercial framing and metal building systems. John Surma, U.S. Steel vice chairman and chief financial officer, noted National's "historically strong position" in construction products and says the transaction would increase his company's "access to this value-added market."

U.S. Steel Chairman Usher (Photo courtesy of U.S. Steel Corp.)

U.S. Steel says the deal is contingent on reaching a new labor agreement with the United Steelworkers of America and also requires approval by the bankruptcy court and regulatory agencies. If the transaction is approved, it would add National Steel's 6.9 million tons of annual capacity to U.S. Steel's 17.8 million tons.

Just three days earlier, International Steel Group Inc. said it had offered $1.5 billion to acquire Bethlehem Steel Corp.'s steelmaking assets. Bethlehem has been operating under Chapter 11 since October 2001.

Usher also indicated that his company may not be finished with acquisitions. "This is certainly not the endgame."