New Delhi - India's Essar Steel has reached an agreement to acquire US steelmaker and distributor Esmark Inc for an enterprise value of 1.1 billion dollars, news reports said Thursday. Essar Steel holdings has agreed to "the material terms of the proposed merger" with Esmark for a cash purchase price of 17 dollars per share, a premium over the stock's ruling market price of 16.79 dollars a share, the Economic Times daily reported quoting Essar officials.
Essar's offer, unanimously accepted by Esmark's board of directors, is now subject to approvals including that of the US government and United Steel workers.
Esmark last year acquired Wheeling Pittsburgh and its steelmaking operations in three US states. Esmark, including Wheeling Pittsburgh, has an annual production capacity of 2.4 million tons and distribution networks across the US.
The acquisition will ramp up Essar's steel-making capacity in the US and Canada to approximately 7 million tons making it a significant player in the two markets.
"This is one more step in realizing our global steel vision of having world-class low-cost assets, with a global footprint," Shashi Ruia, chairman, Essar Global, was quoted by the newspaper as saying.
"Having acquired Algoma and Minnesota Steel last year, this acquisition provides us with an excellent platform for the Canadian and North American markets," Ruia said.
Essar Steel is a part of the 15-billion-dollar international conglomerate Essar Global which operates in business areas including steel, oil and gas, power, communications, shipping, logistics and construction. It has offices worldwide and employs more than 30,000 people.
