Slater Steel Acquiring Auburn Steel Division

Slater Steel Inc. announced that its Slater Steels Acquisition Corp. subsidiary entered into a definitive agreement to acquire substantially all the assets of the Austeel Lemont Division of Auburn Steel Co., Inc. for $7 million cash. The transaction is expected to be completed by this August.

The primary assets of Austeel include an 18-stand continuous bar mill with an annual capacity of 500,000 tons, as well as a melt shop that consists of two 40-ton electric arc furnaces and a three-strand caster.

Austeel has been idle since February 28, 2001.

"We believe that the Austeel acquisition provides the company with a low cost, low risk opportunity to further consolidate the company's position in the North American specialty steel market. It also allows Slater to grow its specialty carbon steel and stainless steel businesses by providing customers with an expanded product offering," said Paul Kelly, president and CEO, Slater Steel Inc. "Moreover, the acquisition enables the company to continue to lower its cost structure through leveraging existing melting capacity."

Slater will use Austeel's modern in-line bar mill to expand Hamilton Specialty Bar's product range and to use the melt shops at Atlas Specialty Steels and Hamilton Specialty Bar. Slater Steel expects to begin operating the Austeel bar mill by the end of this year.