Mittal Steel looks to sell part of operations to Esmark Inc.

Workers at the former Weirton Steel could have their third change of ownership since 2003.
MORGANTOWN, W.Va. (AP) -- Mittal Steel Co. said Thursday it is in negotiations to sell parts of its West Virginia operations to Illinois-based Esmark Inc., the rapidly growing steel supplier that seized control of nearby Wheeling-Pittsburgh Corp. last fall.
Mittal spokesman Dave Allen would not say exactly what assets in Weirton are being discussed, but he told The Associated Press that a nonbinding memorandum of understanding has been signed.
"We do not have a definitive agreement on any of the deal terms," he said.
But the announcement means 1,250 workers at the former Weirton Steel Corp. are now facing their third potential change of ownership since 2003.
Netherlands-based Mittal must sell one of its U.S. assets to resolve antitrust issues raised by its ongoing merger with Arcelor SA of Luxembourg.
The world's largest steelmaker had been weighing the sale of either Weirton or Sparrow's Point near Baltimore and had been awaiting a ruling from the U.S. Department of Justice since deciding it could not dispose of Canadian steelmaker Dofasco Inc.
A spokeswoman told the AP on Thursday that Justice officials have not ruled on which assets Mittal must sell.
Another approach
Mittal, however, has publicly said it would prefer to dispose of Weirton to resolve the antitrust concerns and has previously said there are at least 10 potential buyers.
Among them is former International Steel Group executive Mitchell Hecht, who says Mittal has ignored his offers to buy Weirton, restart the blast furnace to make pig iron and rehire several hundred workers.
The deal with Esmark is subject not only to due diligence by the buyer but also approval of the Independent Steelworkers Union, Allen said.
The union, which did not immediately comment, has the right to reject a change in ownership under the successorship clause in its current contract.
The deal could unite two Northern Panhandle steel companies that past executives had considered merging several times.
"This is the time -- after all these years -- to put these two companies together," said Esmark President Craig Bouchard, who would not immediately provide any further details of the talks.
Weirton and Wheeling-Pitt have potential synergies because Esmark is eager to enter the tin business, and Wheeling-Pitt subsidiary Ohio Coatings Co. is already involved.
Combined with Weirton, Esmark could potentially control about 25 percent of the domestic market for tin-plated steel, used mainly in food cans. And though demand for tinplate has been soft, Esmark expects it to improve.
After years of struggling, Weirton Steel filed for Chapter 11 bankruptcy in May 2003 and was sold twice in 18 months, first to Ohio-based International Steel Group, then to Mittal.
Downsizing at both Weirton and Wheeling-Pitt has cost thousands of jobs in the Northern Panhandle over the past few years, and local schools and businesses have suffered.