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U.S. Steel to Buy Lone Star for $2.1B

Posted on: Thursday, 29 March 2007, 12:00 CDT

U.S. Steel Corp. has agreed to buy oilfield tubular-steel maker Lone Star Technologies Inc. of Dallas for about $2.1 billion, the companies said Thursday.

The combined company will be North America's largest tubular producer and strengthen U.S. Steel's position as a major producer of tubular products for the energy sector, the companies said.

Following the deal, U.S. Steel will have annual North American tubular manufacturing capability of about 2.8 million tons, the companies said.

The $67.50-a-share purchase price is 39 percent more than Lone Star's $48.45 closing price Wednesday and 43 percent more than its 90-day average trading price.

Each company's board has approved the deal, expected to close within six months, the companies said.

Lone Star of Dallas, whose 2006 revenue was $1.38 billion, formed joint ventures with Chinese, Indian and Brazilian steel makers last year.

Pittsburgh's U.S. Steel, with 2006 revenue of $15.71 billion, is an integrated steel producer with operations in the United States and Europe. The seventh-largest steel producer by sales, it makes steel products for the automotive, appliance, container, industrial machinery, construction and oil and gas industries.

Source: United Press International

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