Steel Mills

US Steel Canada Says No to Ontario Steelworks

August 11, 2016

A wolf in sheep’s clothing is still a wolf. Essar Global clothed in the nomenclature of Ontario Steel Investments works is still Essar Global according to US Steel Canada.

The bid by Ontario Steel Investments (Ontario Steelworks), announced on Tuesday, was rejected by US Steel Canada on Wednesday.

US Steel Canada said it had already eliminated Essar Global from the bidding process and would not consider any further proposals by the company.

The first bid by Essar was rejected due to an inability to show evidence of financial resources capable of purchasing and operating USSC. The company also failed to gain the support of the Ontario government.

Essar Global, through Ontario Steelworks, hoped to not only win US Steel Canada but to regain Essar Steel Algoma and combine the two companies into one entity. The bid was strongly supported by the United Steelworkers. The purchase bid included assuming the C$954 million ($734 million) USSC pension plan and a promise to provide a yearly infusion of $25 million for post-employment benefits.

USSC said the Ontario Steelworks bid was similar to the Essar Group bid that was previously rejected.

Ontario Steelworks issued the following statement after the decision by US Steel Canada:

Ontario Steelworks is disappointed by U.S. Steel Canada’s rejection of our revised offer for the company.

We believe our offer is compelling to U.S. Steel Canada’s key stakeholders as it ensures the retirement benefits earned by the company’s current and retired employees will not be eliminated through the [Companies’ Creditors Arrangement Act] process.

Ontario Steelworks is ready and able to demonstrate our financial wherewithal by immediately making a substantial deposit backing our bid, which we have communicated to the company.

We believe our offer has support of the employees of U.S. Steel Canada as well as the local communities of Hamilton and Nanticoke.

We are eager to meet with the Province of Ontario to discuss the merits of our offer as well as the investments we plan to undertake if we are successful in acquiring U.S. Steel Canada.

Despite U.S. Steel Canada’s rejection, we remain committed to the process and hope the company will allow us to address the concerns raised in their released statement.

Sources advised Soo Today that Essar remains interested in acquiring Essar Steel Algoma.