DOJ Calls for Mittal to Sell Sparrows Point Mill

The United States Department of Justice has called for Mittal Steel Co. to divest its Sparrows Point steel mill, located near Baltimore. The call to divest the mill is a step the DOJ is requiring to reduce any competitive advantage that Mittal may enjoy after acquiring Arcelor S.A.

In its ruling the DOJ ruled that the acquisition would significantly reduce competition in the market for tin mill products in the eastern United States.

To remedy the Department’s competitive concerns, the proposed consent decree required Mittal to divest a steel mill that supplied tin mill products to the eastern United States. Mittal’s first obligation was to attempt to divest Dofasco Inc., a Canadian company owned by Arcelor. However, the proposed consent decree anticipated the possibility that Mittal might be unable to sell Dofasco because Arcelor had, in an attempt to defeat Mittal’s hostile takeover bid, placed legal title to Dofasco into a Dutch foundation.

Therefore, in the event the sale of Dofasco could not be carried out as required, the proposed consent decree gave the Department the right to select for divestiture either Mittal Steel’s Sparrows Point mill or its Weirton mill, located in Weirton, W.Va.

The Department has determined after a thorough review that, among these two alternate facilities, the divestiture of Sparrows Point will most reliably remedy the anticompetitive effects of the acquisition.

Various sources have bandied about several potential buyers for the mill, including steel mills in both Europe and Asia.

ThyssenKrupp, a German company that has been growing its steel business, said it has no interest in acquiring the steel mill. ThyssenKrupp had earlier attempted to purchase Dofasco.