Search Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

AK Steel sees no antitrust issues in mill buy

Keywords: Tags  steel, AK Steel, Roger Newport, Dearborn mill, acquisition, antitrust, Justice Department, U.S. Steel ArcelorMittal

NEW YORK — AK Steel Corp. expects to win U.S. Justice Department approval for its proposed $700-million acquisition of OAO Severstal’s integrated mill in Dearborn, Mich., because the deal would not give the company an overly large share of the automotive steel market, a company executive said.

"We have competing products, especially with aluminum now. ... We have competitors: U.S. Steel (Corp.), ArcelorMittal (SA), Nucor (Corp.), Steel Dynamics (Inc.). And you have imports. Imports are still 20-plus percent of our market, have been forever," chief financial officer Roger K. Newport told analysts and investors at Jefferies LLC’s 10th annual Global Industrials Conference in New York. "You’ve got plenty of competing markets and suppliers out there."

AK Steel’s automotive steel capacity will rise to about 8 million tons annually with the Dearborn deal, Newport said. Other large suppliers include Fort Wayne, Ind.-based Steel Dynamics with its parallel acquisition of Severstal’s Columbus, Miss., mini-mill, Charlotte, N.C.-based Nucor and Luxembourg-based ArcelorMittal.

"Relatively speaking, it’s not like we’re becoming that big. Time will tell, but I’d be surprised" if substantive antitrust obstacles arose, he said. "But ... it is a government review, and I don’t know what their perspective will be."

Although the West Chester, Ohio-based steelmaker recently submitted paperwork for the initial antitrust review, Newport declined to specify the exact date of the submission, calling the timing sensitive and citing Justice Department rules.

AK Steel, which expects the transaction to be completed as early as the third quarter or sometime in the fourth quarter of this year, had said previously that it likely would finance the deal with a mix of 60 percent debt and 40 percent equity, but Newport said the exact mix would "depend on the market at the time we close the deal."

Newport criticized the decision of Standard & Poor’s Ratings Services to place AK Steel on a negative credit watch following the announcement of the Severstal deal, calling the move disappointing but unsurprising. He said AK Steel expects the Dearborn deal to enhance the company’s credit profile (, July 21).

However, concerns have surfaced questioning AK Steel’s ability to finance the deal (, July 21).

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Latest Pricing Trends