European Merger May Produce No. 3 Steelmaker

Europe could soon have a new No. 1 steel producer -- the world's third largest -- following intensive merger talks under way between British Steel and the Netherlands' Hoogovens. If the deal goes ahead, the combined group will have sales of $16 billion a year and a market capitalization of over $6 billion. Hoogovens is half the size of British Steel in terms of sales. The merger would create a company with 70,000 employees. The merger talks apparently are a result of severe profit pressures at both companies from weak steel prices and, for British Steel, from the strength of the British pound. Last year Hoogovens made a net profit of $290 million, while British Steel posted $455 million.