Steelmaker Wheeling-Pittsburgh Corp. and privately-held steel distributor Esmark Inc. have signed an agreement to combine the two companies. The combined company will use the Esmark Inc. name.
The transaction is subject to approval by Wheeling-Pitt and Esmark shareholders as well as other regulatory approvals, and is expected to close by summer 2007.
Esmark first proposed the merger last year and successfully ousted Wheeling-Pitt's board in a shareholder vote in November. Esmark's James P. Bouchard was elected Wheeling-Pittsburgh chairman of the board and CEO December 1.
Mr. Bouchard commented on the merger: "Today marks an important milestone in our vision to build the most efficient downstream steel
production and
distribution company in the
US. By blending the mini mill, service center, converter and finishing assets of the two companies, we expect to be able offer our customers across the Midwest a low-cost
production and just-in-time delivery method unrivaled in the domestic steel industry."
Wheeling-Pittsburgh also reported fourth quarter and full-year financial results in a separate announcement: The company experienced a net loss of $18.1 million in the fourth quarter, compared to a net loss of $23.4 million in the fourth quarter of 2005. Net sales for the fourth quarter fell to $332.3 million, compared to $356.0 million in the same quarter of the previous year.
For the full year, the company reported a net income of $6.5 million, compared to a net loss of $33.8 million for 2005, with net sales of $1,770.8 million, compared to $1,560.5 million in 2005.
New chairman of the board and CEO James Bouchard commented to the press about the results, “Clearly, the company's 2006 results were a disappointment. We began our jobs of turning this Company around on December 4. We have reconstructed the management corps at the company and they are doing their jobs well. We will convert this company into the most efficient downstream steel
production and
distribution company in the United States.”