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Battle over Stelco wins US Steel

World consolidation of stealmaking continues. American giant US Steel, the one that also owns steel companies in Košice, announced yesterday, that is buying the canadian firm Stelco for more than a milliard of dollars.

Stelco used to be the biggest canadian steel company. But in the last years had very serious problems, two years ago it had to even ask for creditors´s protection, it overcame these problems in April. Recently during the half of the year Stelco the last and biggest steel company in Canada, announced considering the possibility of a takeover or a fusion with another company. Primary reason for this decision was the company´s debts with a value over 760 milliion of dollars and high costs that the company has on retirement funds for their employees.

Immediately several companies were interested to purchase Stelco, even Russian OAO Severstal or Ukraine Metinvest. Based on shareholders decision the winner was US Steel.

US Steel will get to the source of raw steel, which it wants to “improve” in their factories in USA, to a higher quality and therefore obtain higher prices. Production capacity will improve from 6 mil tons to 33 mil tons and the company expects utill 2008 to reach 100 mil of dollars in synergic savings.

Source: hn.ihned.cz