US Steel joins the buying party
In yet another blow to an independent Canadian steel industry and yet another step in the worldwide consolidation of the steel industry, US Steel, the #1 US steelmaker, announced it has agreed to buy Canada-based Stelco in a $1.1 billion (US) deal. Stelco has facilities for both flat and tube steel production.
Stelco had emerged from bankruptcy last summer, and was clearly on the block. Russia's Severstal, Germany's ThyssenKrupp, and Ukraine's Metinvest, all major steel firms, had expressed some interest. The move follows three buyouts of other Canadian steel companies: 2006 purchase of Dofasco by Arcelor Mittal, as well as the 2007 purchases of Algoma Steel by Indian company Essar Steel and of Ipsco Steel by Swedish-based SSAB. The five deals pretty well signal the demise of any independent Canadian steel industry.
On US Steel's part, the move is partly defensive. It will make the company the #5 steel company in the world, still a far cry from when the company was the undisputed world leader. According to a Wall Street Journal article ("U.S. Steel Buys Stelco for $1.1 Billion", 8/27/06): "U.S. Steel itself was thought to be in some danger of being gobbled up by a larger competitor. By acquiring Stelco, U.S. Steel, once the world's largest steelmaker, is helping to insulate itself from a potential acquirer."
Bloomberg News reports that there have been over 200 steel deals this year alone, though most of them small ones.
7:58:31 PM 
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