Feds Clear U.S. Steel-Lone Star Deal

By DANIEL LOVERING

PITTSBURGH – Federal antitrust authorities have approved United States Steel Corp.’s planned acquisition of Lone Star Technologies Inc., a maker of welded pipe used in oil fields.

The $2.1 billion cash deal, announced in March, will make U.S. Steel the largest producer of tubular steel in North America.

The government has finished its review of the terms of the sale and ended a waiting period on the transaction, according to a Federal Trade Commission notice filed Thursday. The companies expect to complete the deal in the second quarter of 2007.

Pittsburgh-based U.S. Steel will be able to produce about 2.8 million tons of tubular steel in North America annually after the transaction is completed, the company has said.

Lone Star, based in Dallas, is a $1.4 billion holding company with subsidiaries that manufacture and market oil-field casing; tubing and line pipe; specialty tubing products; flat-rolled steel; and other tubular products and services. It shipped 1 million tons of tubular steel in fiscal 2006. U.S. Steel’s tubular business shipped 1.2 million tons and had revenue of $1.8 billion during the same period.

Shares of U.S. Steel rose 56 cents to $111.08 Friday, while shares of Lone Star rose 25 cents to $67.06.

The purchase is expected to boost U.S. Steel’s per-share profit this year, excluding accounting adjustments related to inventory. The company plans to fund the transaction with cash on hand and credit.

The deal is subject to Lone Star shareholder approval.

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On the Net:

U.S. Steel Corp.: http://www.ussteel.com

Lone Star Technologies Inc.: http://www.lonestartech.com