INLAND BEING SOLD TO DUTCH STEEL FIRM (original) (raw)

Inland Steel Co., the nation’s sixth-largest steel maker, is being sold to Dutch-based Ispat International NV for 888.2millionincash.Ispatalsowouldassume888.2 million in cash. Ispat also would assume 888.2millionincash.Ispatalsowouldassume539 million in debt, bringing the total value of the deal to $1.43 billion.

Inland Steel, a division of Chicago-based Inland Steel Industries Inc. with one plant, in East Chicago, said the combined operations of Inland and Ispat would create the world’s eighth-largest steel producer, shipping more than 12.5 million tons of steel annually, with revenue in excess of $4.6 billion.

Under terms of the deal, which must receive shareholder and regulatory approval, Ispat would pay 650millionforInlandcommonstocksharesand650 million for Inland common stock shares and 650millionforInlandcommonstocksharesand238.2 million for preferred stock held by the company.

“We are extremely pleased with this acquisition, as it meets our strategic objectives of establishing a major presence in the U.S. market in 1998,” said Lakshmi N. Mittal, Ispat’s chairman and CEO.

The United Steelworkers of America, under a union contract provision, also would get the right to make its own offer to purchase Inland, the company said.

In early trading on the New York Stock Exchange, Inland Steel Industries stock jumped 3.621/2,or15.5percent,to3.62 1/2, or 15.5 percent, to 3.621/2,or15.5percent,to27 a share. Ispat shares listed on the Big Board rose 1.25,or5.1percent,to1.25, or 5.1 percent, to 1.25,or5.1percent,to26 a share.

Major Inland shareholders had been urging the board to sell the steel division and spin off its 87 percent stake in metals distributor Ryerson Tull Inc. to boost shareholder returns.

Inland said in the future its primary business will be metals distribution. It said it is considering combining Inland Steel Industries and Ryerson Tull after the close of the sale to Ispat.

“In evaluating strategic alternatives for increasing shareholder value, it became clear that steel companies with an international production capability and global market reach will have a major edge over other producers,” said Robert J. Darnell, Inland’s chairman and chief executive. Darnell would become head of Ispat’s North American operations.

Originally Published: March 17, 1998 at 1:00 AM CST