Acquisition of Sparrows Pt. steel plant in Baltimore County bumps up

Daily Record, The (Baltimore), Dec 11, 2007 by Andy Rosen

Ownership of the Sparrows Point steel plant in Baltimore County remained in limbo Monday, as officials worked to complete a government-mandated deal by midnight.

Tuesday marks the end of a negotiating window agreed to by Mittal Steel Co. NV and the investment group E2 Acquisition Corp. The two companies agreed to the deal in August, and it is intended to satisfy U.S. Department of Justice concerns about Mittal's market power after it merges with Arcelor SA to create the world's largest steelmaker.

The deal has dragged past its original target date of Oct. 31, and labor concerns about future employment at the plant are reportedly a factor. Sparrows Point employs around 2,500 and the deal is expected to cost around $1.35 billion.

John Cirri, president of United Steelworkers Local 9477, which represents Sparrows Point employees, told The Associated Press that Mittal hadn't yet resolved the question of retirement benefits for about 84,000 retirees. Though the company is not required under federal law to come to a concrete agreement before the sale, it could be holding up the deal.

Joseph G. Krauss, a Washington attorney appointed by the Justice Department to serve as trustee and shepherd the deal to completion, said he could not discuss specifics of the negotiations. He said the Tuesday date was part of the agreement between the two companies.

If there is no deal by Tuesday, Krauss said, the companies could either agree to an extension or extinguish the talks. If the talks are called off, Krauss will step in to help find a new buyer for the plant.

E2 is a consortium of several companies, let by Esmark Inc. in Chicago Heights, Ill. Chairman and CEO Craig T. Bouchard said by e- mail that he could not discuss the progress of the deal, but it was being worked on as of Monday afternoon.

He told The Associated Press last week the delay reflected the lack of an agreement between Mittal and the United Steelworkers union to pay benefits to the plant's retirees -- an obligation Bouchard said Mittal inherited when it bought Sparrows Point in 2005. E2 also includes partners from Ukraine and Brazil.

Mittal's sale of Sparrows Point would also help clear the way for approval of the merger with Arcelor. The two companies were told to divest from Sparrows Point due to concerns that they would monopolize the production of tin plate after their $41 billion merger.

Mittal got several extensions beyond its initial deadline to sell the plant, as it looked for a suitable buyer.

William Steers, a spokesman for the company, said in an e-mailed statement that Mittal is ready to close the deal.

"ArcelorMittal has met all necessary conditions for closing the transaction other than conditions that would, in the normal course, be met during the closing," Steers wrote.

He said discussions about the deal's effect on workers at the plant are not the holdup.

The Associated Press contributed to this article.