Posted on 02/07/2003 7:11:08 AM PST by Hermann the Cherusker
Reuters
UPDATE - Bethlehem Steel agrees to be acquired by ISG Wednesday February 5, 1:47 pm ET
(Adds details on the terms of the deal, background)
BETHLEHEM, Pa., Feb 5 (Reuters) - Bankrupt Bethlehem Steel Corp. (OTC BB:BHMSQ.OB - News) on Wednesday said it reached an agreement to be acquired by International Steel Group (ISG), creating the largest U.S. steel company.
Terms of the deal were not disclosed, but will be presented to Bethlehem's board on Saturday, the company said. ISG, which is backed by New York buyout fund W.L. Ross & Co., on Jan. 6 had offered $1.5 billion for most of Bethlehem's assets.
On a conference call with reporters, officials said the price of the deal had changed over the last month, but declined to discuss changes in detail. They said W.L. Ross, led by restructuring specialist Wilbur Ross, would acquire more assets and more liabilities of the company.
The deal must be approved by Bethlehem's board, the bankruptcy court overseeing Bethlehem's Chapter 11 case, and the federal government.
The deal also needs the approval of Bethlehem's creditors. Bethlehem's retirees, who form part of the unsecured creditors group, have so far opposed ISG's terms.
Ross said on the conference call that the deal included some $100 million to offer buyouts for senior employees to retire.
Bethlehem Steel, whose origins date back 150 years, filed for Chapter 11 bankruptcy protection in October 2001. The company, whose work force in the 1920s topped 60,000, currently employs about 11,000 people. In 2002 it had revenues of about $3.5 billion and shipments of 7.5 million tons of steel products.
ISG, which was organized by W.L. Ross in April 2002, acquired the principal steelmaking and steel-finishing assets of LTV Corp in April 2002. In October 2002, ISG bought a sheet mini-mill in Illinois that had been operated by Acme Steel Co.
According to ISG, with the acquisition of Bethlehem Steel it would be the largest integrated producer of steel in North America, with over 16 million tons of annual shipments. (Reporting by David Brinkerhoff and Dane Hamilton, editing by Leslie Adler; Reuters Messaging: david.brinkerhoff.reuters.com@reuters.net; +1 646 223 6033; david.brinkerhoff@reuters.com)
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