X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

PHILADELPHIA-Pittsburgh-based US Steel has entered into an agreement with New York-based private equity fund, Apollo Management L.P., to sell its coke operations in Clariton, PA and Gary, IN, along with its Minntac iron ore operations in Mt. Iron, MN and Transtar, its wholly owned railroad/barge transportation services subsidiary, to a new entity being formed by Apollo for $500 million. US Steel, which is the largest steel maker in the US, will retain a 20% interest in the new company.

The deal provides U.S. Steel with capital to “redeploy capital to other potential uses, such as strategic acquisition opportunities, debt reduction or voluntary contributions to employee benefit plans,” says Thomas Usher, chairman, president and chief executive officer, in a statement. At the same time, the deal secures “a stable, long-term supply of our critical raw material requirements,” he adds.

A year ago, US Steel was split from Houston-based Marathon Oil Corp., a move that, according to published reports, cost the steel company several hundred million dollars in debt refinancing. US Steel has publicly announced plans to lead the domestic steel industry in consolidations, and Wall Street analysts have speculated that as many as a half dozen smaller domestic producers could be targets for acquisition.

Charles Gedeon, current executive vice president of raw materials, announces he will resign from US Steel to head the new company. The company formed by Apollo will assume “all collective bargaining agreements, certain benefit obligations and certain other liabilities,” according to the statement.

The transaction is subject to US Steel shareholders’ approval and the negotiation of unspecified agreements and conditions. The parties are expected to reach definitive agreements by the end of this year and close the deal in the first quarter of 2003.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. NET LEASE 2020Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.