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Justice Department Okays Sale of Sparrows Point to E2 Acquisition

09/06/2007 - The United States Department of Justice approves E2 Acquisition Corp.’s acquisition of the Sparrows Point mill from ArcelorMittal USA for a purchase price of $1.35 billion.

Esmark, Wheeling-Pittsburgh Corp., and E2 Acquisition Corp. (E2) jointly announced that the United States Department of Justice has approved the acquisition by E2 of the Sparrows Point mill from ArcelorMittal USA. The purchase price was confirmed at $1.35 billion.
 
ArcelorMittal’s Sparrows Point facility is a former Bethlehem Steel fully integrated steel-making facility capable of producing 3.9 million tons of raw steel annually.

 “We believe the strategic relationship being forged between Sparrows Point and Wheeling-Pitt will enable Wheeling-Pitt to continue its intense focus on EAF hot-charging and cost reduction.
 
“Wheeling-Pitt will also enter into a strategic slab purchase agreement with Sparrows Point, which will simultaneously increase shipments and fuel revenue growth.
 
“The Esmark and Wheeling-Pitt management teams recognized the extraordinary potential of these two companies and initiated the pursuit of Sparrows Point. It’s a very rewarding day for both companies.”
James P. Bouchard,
CEO and Chairman,
Wheeling-Pittsburgh Steel and Esmark

“The approval by the DOJ of our Sparrows Point acquisition is a notable milestone,” said Craig T. Bouchard, CEO and Chairman of E2 Acquisition Corp. “We wish to thank the Mittal family and its very professional transaction team for working with us, the United Steelworkers of America for supporting our bid, and IUD Donbass and CVRD, our strategic partners, for their strong support of our North American strategy. We are confident that the acquisition of the historic steel facility at Sparrows Point, located on the deep-water port of Baltimore, is an opportunity not soon to be seen again.”
 
Craig Bouchard also extended a note of appreciation to the company’s banks and financial investors. “Esmark, Wheeling-Pittsburgh, IUD Donbass, CVRD and our financial investors contributed $790.5 million of equity to provide a sound financial base to our company. Our banks and institutional lenders provided the debt we need to close the deal and grow our company. The fact that these facilities were put in place with no syndication contingency is a testament to Wall Street’s confidence in our strategy,” he said.
 
Bouchard added that he believed the Sparrows Point transaction is one of only a few large transactions to clear the global M&A market since July 10.
 
The transaction is expected to close at the earliest possible date, subject to oversight and approval by the recently appointed court trustee.
 
Headquartered in Chicago and founded by the Bouchard Group, Esmark Inc. is a steel services family of companies. Its mission is to establish benchmark standards for strategic consolidation, operating efficiency and management excellence in the steel services sector.
 
Wheeling-Pittsburgh is a steel company engaged in the making, processing, and fabrication of steel and steel products using both integrated and electric arc furnace technology. The company's products include hot rolled and cold rolled sheet and coated products such as galvanized, pre-painted and tin mill sheet. The Company also produces a variety of steel products including roll formed corrugated roofing, roof deck, floor deck, bridgeform, and other products used primarily by the construction, highway and agricultural markets.