All parties involved in the $1.35 billion sale of the Sparrows Point steel mill remained quiet on the transaction Tuesday, following the passing of a self-imposed midnight Monday deadline to complete the deal.
Spokesmen for MittalSteel Company NV, the plant?s current owner, and Chicago-based steel distributor Esmark, one of the investors seeking to buy the property, declined to comment on the status of negotiations, but said the parties continue to work on saving the deal.
Craig T. Bouchard, who heads global investment group E2 Acquisitions Corp. and is a co-founder of Esmark, blamed the delays on the lack of an agreement between Mittal and the United Steelworkers union covering benefits for the plant?s 84,000 retirees ? an obligation Bouchard said Mittal inherited when it bought Sparrows Point in 2005. However, Mittal has said that U.S. labor law requires it to negotiate only with the union regarding possible effects of a sale, and does not require an agreement before selling.
“We continue to work with all parties involved, including E2 Acquisition Corporation, the union and the [Department of Justice], to bring a successful conclusion to this process,” Mittal spokesman William Steers said in a statement. He declined to comment on specifics of the negotiations.
John Cirri, president of United Steelworkers Local 9477, could not be reached for comment Tuesday.
The U.S. Department of Justice approved the sale in September, but the deal was not completed by Nov. 30, when Esmark?s agreements with its international partners lapsed. Bouchard said last week that the group?s three other investors remained committed to the deal but indicated new partners might be added.
In February, Department of Justice ordered Mittal to sell the Sparrows Point plant, which employs about 2,500 workers, on antitrust concerns after the company?s acquisition of competitor Arcelor S.A.
The Department of Justice appointed Washington, D.C., antitrust lawyer Joseph G. Krauss as trustee overseeing the sale. He has the authority to find another buyer for the property if the Mittal-E2 deal is not completed.
“Mittal would have a continuing obligation to divest, and would continue to be owner and operator of the plant,” Krauss said.
The Department of Justice?s order to divest the property requires any buyer to use it as a “viable, ongoing business engaged in producing tin mill products,” unless the department consents to another use.
“I believe there is language to that effect,” Krauss said, “that the point of the divestiture is that Sparrows Point will continue to operate as it exists today.”
Timeline of the Sparrows Point deal:
» Feb. 20: The U.S. Department of Justice requires Mittal Steel Company NV to divest its Sparrows Point steel mill after the company?s acquisition of a competitor.
» Aug. 2: Mittal agrees to sell Sparrows Point for $1.35 billion to an international investment group, E2 Acquisition Corp., formed for the purchase and led by Illinois-based steel distributor Esmark.
» Sept. 5: The Department of Justice approves the transaction.
» Nov. 30: Esmark?s agreements with its international partners lapse with the deal not completed, according to E2 CEO Craig Bouchard. Both parties agree to extend a completion deadline until Dec. 10.
» Monday: The parties? self-imposed deadline expires at midnight with no deal completed.
» Tuesday: Esmark and Mittal spokesmen decline comment on negotiations but say both sides continue to work to complete the deal.
Source: The Associated Press, company and government news releases.
The Associated Press contributed to this story.
