The Stel Salaried Pensioners Organization wishes to thank The Hamilton Spectator for permission to post the following article published in the October26, 2007 edition
End of an era: Stelco shareholders formally approve takeover by U.S. Steel
TORONTO - After years of financial problems
and restructuring, Hamilton-based Stelco Inc. (TSX:STE) moved closer to the end
of its life as an independent Canadian company with little pomp other than a
round of applause Friday as shareholders formally approved a takeover by U.S.
Steel.
At the big steelmaker's last meeting, 88 per
cent of shares were voted, with virtually all in favour of the US$1.1-billion
deal.
The five-minute meeting in Toronto didn't
include any questions.
"U.S. Steel is the right company to
come in and provide a lot of security for the people (at Stelco)," CEO
Rodney Mott said after the meeting.
He said he wasn't aware of any
"concrete" plans for Stelco once it's merged into U.S. Steel, but
expected the new owners would focus on the US$100 million in possible synergy
savings previously discussed.
"They'll probably want to take a bit
more time to evaluate the facilities and really work on their strategic plan
before they announce anything," he said.
But, he added, he expects the new owner to
continue running Stelco's two Ontario plants "to get the highest level of
productivity they can."
"There's two main things that they like
about Stelco - obviously the Lake Erie plant is a very fine operation - but
they're also looking within U.S. Steel (because) they need additional
steelmaking, and the additional steel-making is available out of
Hamilton."
Stelco had sought potential bidders since
emerging from bankruptcy restructuring nearly two years ago, cutting costs,
reducing debt and improving its efficiency to make itself more attractive to
potential bidders.
In its last earnings report as a
Canadian-owned company Wednesday, Stelco reported a net profit of $38 million
or $1.26 per share in the third quarter, reversing a loss of $25 million or 93
cents a share for the same period a year ago.
The gains were due in part to $5 million in
savings from job cuts and other streamlining and foreign-exchange increases of
$36 million.
Pittsburgh-based U.S. Steel Corp. agreed to
buy Stelco for $38.50 in cash per common share in August after it outbid
Russia's OAO Severstal.
The deal already had approval by
shareholders holding more than 76 per cent of Stelco's outstanding shares -
including Tricap Management Ltd., Sunrise Partners LP, Appaloosa Management LP
and Mott.
Stelco expects the deal to close at the end
of the month.
Mott said he doesn't plan to stay on with
the new company, saying U.S. Steel will have its "own system to run the
business and (will) be bringing in their own team to do that."
"I'm just going to enjoy the holidays,
catch up with family," he said. "I don't have any career or business
plans going forward."
Stelco's sale follows a series of steelmaker
marriages occurring after several years of solid growth, high prices and
soaring demand from China, India and other rapidly growing countries.
Other Canadian steelmakers purchased by
foreign companies in the past two years include:
-Ipsco Inc., a company that originated in
Regina and continues to operate there as well as in several U.S. states, was
purchased for US$7.7-billion by SSAB Svenskt Stal AB of Sweden.
-Algoma Steel Inc. of Sault Ste. Marie,
Ont., bought for $1.85 billion in June by Essar Steel Holdings Ltd. of India,
which has said it plans to invest $500 million to upgrade and expand operations
Algoma's operations.
-Harris Steel Group Inc. of Toronto,
purchased for $1.25 billion in March by Nucor Corp. of the United States.
-Dofasco Inc. of Hamilton, acquired for
$5.6-billion in February 2006 by Arcelor SA of Luxembourg, which is in the
process of merging with Mittal Steel of the Netherlands.
On the TSX Friday, Stelco's thinly traded
shares were up three cents at $38.41.