Steel executives predict further consolidation
NEW YORK — The chiefs of two of the world's largest steelmakers said Thursday they see more consolidation ahead, most likely across continents and within China's fragmented and fast-growing industry.
Lakshmi Mittal, chief executive of Arcelor Mittal, and John Surma, chief executive of United States Steel Corp., told The Associated Press in a joint interview that the steel industry can expect to see more intercontinental combinations like those of the past year as opposed to the more-regional marriages of earlier years.
The executives were in New York for a board meeting of the International Iron and Steel Institute, for which Surma serves as chairman.
"I think consolidation now will be between bigger companies and perhaps across longer distances and will be bigger transactions," Surma said. "How quickly that happens depends on how adventuresome companies are and how much they want to risk."
Last year, Mittal Steel Co. NV bought Arcelor SA for $41 billion after a prolonged battle. The combined company still faces some regulatory hurdles, but when the deal closes it will become the world's largest steelmaker with 10 percent of global production.
The steel industry has had spate of smaller combinations, as well. On Tuesday, Chaparral Steel Co. said it accepted a $4.22 billion takeover bid from Canada's Gerdau Ameristeel Corp. Earlier in the year, Russia's Evraz Group SA bought Oregon Steel for $2.3 billion.
There is speculation that Pittsburgh-based U.S. Steel Corp., the largest U.S.-based producer, may itself be a target.
Asked whether either Arcelor Mittal or U.S. Steel had plans to buy the other, Surma and Mittal emphatically said they did not.
China — which has doubled its steel production in five years — may be the next hot spot for deals, they said.
