U.S. Steel buys Canada's Stelco for $1.1 billion

U.S. Steel Corp. said late Sunday, Aug. 26, that it will buy Canadian competitor Stelco Inc. in a deal valued at $1.1 billion.

The move is expected to strengthen U.S. Steel’s business with the automotive industry and benefit its operations near Detroit.

Stelco’s Lake Erie Works in Ontario is one of the most modern integrated steel plants in North America.

“With major facilities located on both sides of the Great Lakes, this acquisition will significantly increase our ability to respond to market demands and our customers’ needs,” U.S. Steel CEO John Surma said in a statement.

Stelco, of Hamilton, Ontario, emerged from bankruptcy in March 2006 but lost $187 million for the year ending Dec. 31, in part because of lower demand from its automotive customers.

During a conference call today, Surma said the deal has the support of shareholders and steel worker unions.

“I can say the steel workers approve of our transaction and support it,” he said. “It's full steam ahead.”

U.S. Steel’s total annual steel making capacity is expected to rise from 26.8 million tons to 33 million tons.

Surma said 25 million tons of that capacity will be in North America, “making us the fifth-largest steel maker in the world.”

The deal is expected to close by year end.