Esmark announces joint venture to buy Winner Steel assets

Duferco is part of the group that's buying Winner Steel.
MORGANTOWN, W.Va. (AP) -- Esmark Inc., the fast-growing Illinois company that vows to dominate the Midwest steel market, said it has teamed up with international partners to buy the assets of Winner Steel Inc., in Sharon, Pa.
Esmark has formed a joint venture with Russia's Novolipetsk Steel and Switzerland's Duferco Group to buy the galvanized-steel operations for an undisclosed price, the companies said in a joint statement. The deal could be completed by the end of the second quarter.
Winner Steel is one of the largest independent producers of galvanized steel in the United States, with three lines that can produce some 1.2 million tons a year. Its products are used mainly for construction, appliances and automobiles.
Winner Steel has operated in Sharon since 1995. It has about 200 employees represented by the United Steelworkers.
Winner is located near the former Sharon Steel plant in Farrell, Pa., which was sold to Duferco in 1998. The Farrell facilities already supply cold-rolled steel to Winner, so the new arrangement ensures the long-term stability of that supply.
"Winner Steel is a logical component of our North American growth strategy," said Benedict Sciortino, director of Duferco Group.
Esmark Chairman and CEO James Bouchard said the joint venture will help his four-year-old company solidify its position as a full-service business that can both convert steel slabs and distribute products through its network of service centers.
About the companies
Novolipetsk Steel is one of the three largest flat-steel producers in Russia, while Duferco Group is involved in production and distribution of a variety of steel products, including raw materials to make steel.
Esmark, based in Chicago Heights, seized control of West Virginia's Wheeling Pittsburgh Corp. in a proxy fight last fall and now aims to buy the Weirton division of Mittal Steel Co. if federal regulators and the Independent Steelworkers Union approve.
Esmark also announced this week it is proceeding with its long-standing plan to formally merge with Wheeling-Pitt. Existing Wheeling-Pitt shareholders would get one share of stock in the new company for each share currently held.
Esmark has offered 20 a share for up to half of Wheeling-Pitt's 14.7 million shares. It is also offering existing shareholders the right to invest up to 200 million at a price below 20 and continue with the combined company.
Esmark would issue 17.5 million Wheeling-Pitt shares to its own shareholders in exchange for 295 million.
If both boards of directors approve of Esmark's proposal, the merger will be voted on by shareholders of both companies.