PITTSBURGH--United States Steel Corp. will acquire Lone Star Technologies Inc. for $2.1 billion in cash.
US Steel expects the acquisition of Lone Star to strengthen its position as a producer of tubular products for the energy sector and will create North America's largest tubular producer, with manufacturing capacity of 2.8 million tons (2.5 million metric tons).
"This transaction represents a compelling strategic opportunity for US 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," says John P. Surma, US Steel chairman and CEO.
"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, US Steel will be better positioned to serve the international oil and natural gas industry as the provider of choice for tubular products."
"Our complementary strengths will better position Lone Star to pursue significant new growth opportunities for the benefit of our customers, distributors and end users," says Rhys Best, Lone Star chairman and CEO.
Under the terms of the definitive agreement, US Steel will acquire all outstanding shares of Lone Star for $67.50 per share in cash - an aggregate value of approximately $2.1 billion.
The companies' boards have approved the acquisition, but it still is subject to the approval of Lone Star's shareholders and other customary closing conditions, including regulatory approvals. The transaction is expected to close in the second half of this year.