Essar Steel said May 1 it planned to acquire U.S. steel company Esmark, valuing the deal at $1.1 billion, as it pushes ahead with an aggressive North American expansion drive.
With the planned buy, Essar will have nearly seven million tons of steelmaking capacity in the U.S. and Canada, making it a significant North American player, the company said.
The proposed purchase by India's third-largest steelmaker, part of the oil- to-communications group Essar Global, is another sign of cash-flush corporate India spreading its wings worldwide. "This is one more step in realising our global steel vision of having world-class, low-cost assets, with a global footprint," Essar Global Chairman Shashi Ruia said.
The deal comes after Essar, India's third-largest steelmaker which operates an integrated steel plant in India, bought Canada's Algoma Steel Inc for $1.63 billion and Minnesota Steel of the U.S. for an undisclosed sum, last year.
Steel prices have been climbing as a result of strong demand from India and China and other emerging countries, triggering consolidation in the global steel industry. Indian steel companies have been helping spearhead this drive as they push to become world players.
The offer was "unanimously accepted" by Esmark's board and is subject to customary U.S. government and union approvals, Essar said.
Copyright Agence France-Presse, 2008
