Steel Mills
Supermill Merger for Canada?
Written by Sandy Williams
March 1, 2016
An Essar Steel Algoma and US Steel Canada combo may be in the works. Bloomberg reports that bidders for US Steel Canada are looking at combining the operations at Algoma with those at Hamilton and Lake Erie Works. The resulting steel company could become a major competitor in the North American steel market.
Potential bidders, according to Bloomberg, are Bedrock Industries, a New York firm focused on mining; Algoma’s parent company Essar, funded by Essar Capital Ltd.; and ERP Compliant Fuels.
Both Essar Steel Algoma and US Steel Canada are under Canadian creditor protection while the sales and solicitation process proceeds. US Steel Canada was separated from its parent company, US Steel Corp., in October and just yesterday learned that $2.2 billion of claims by US Steel have been confirmed as debt by the Ontario Superior Court. US Steel has said it will not bid on the Canadian assets but the ruling may give it more influence on any potential sale.
Bloomberg says a consortium of banks led by Deutsche Bank AG is considering a bid for Essar Steel Algoma and may also be interested in the US Steel Canada assets. Algoma began its sales procedure on February 11, 2016.
US Steel Canada said in an email earlier today to SMU that it is focusing on operating its business and reviewing bids received during Phase I of the Sale and Investment Process (SISP).
Sandy Williams
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