United States Steel Corp. and Lone Star Technologies, Inc. have entered into a definitive agreement under which U. S. Steel will acquire Lone Star, a manufacturer of welded oilfield tubular goods.
U. S. Steel expects that the acquisition of Lone Star will strengthen its position as a premier producer of tubular products for the energy sector and will create North America's largest tubular producer. The transaction will broaden U. S. Steel's energy product offerings by joining U. S. Steel's predominantly seamless tubular business with Lone Star's complementary welded tubular business, coupling manufacturing and tubular processing services. Following the transaction, U. S. Steel will have annual North American tubular manufacturing capability of about 2.8 million tons.
U. S. Steel Chairman and CEO John Surma said, "This transaction represents a compelling strategic opportunity for U. S. Steel to strengthen our position as a supplier to the robust oil and natural gas sector by significantly expanding our tubular product offerings, our production capacity and our geographic footprint.
"With a comprehensive portfolio of high-end products, enhanced production capabilities, excellent positions in both welded and seamless pipe, and a strong commitment to quality, service and innovation, U. S. Steel will be better positioned to serve the international oil and natural gas industry as the provider of choice for tubular products. Also, because Lone Star is a significant purchaser of hot bands and slabs, this acquisition should allow us to better optimize our domestic hot-end operations over a range of market conditions."
Rhys Best, Chairman and CEO of Lone Star stated, "We are very excited about today's announcement. We believe that this combination will deliver superior value to Lone Star's shareholders as well as provide our employees with an opportunity to be part of a larger enterprise. Our complementary strengths will better position Lone Star to pursue significant new growth opportunities for the benefit of our customers, distributors and end users. This transaction will enable an enhanced and wider range of products, even higher service levels and greater manufacturing efficiencies. We look forward to working with the U. S. Steel team to ensure a smooth transition."
The deal is expected by the end of the third quarter of the year.