U.S. Steel to acquire Canadian firm

pittsburgh -- United States Steel Corp. is buying Canadian steel maker Stelco Inc. for about $1.1 billion in a move expected to bolster the American company’s position as a supplier to the North American automotive industry.

Pittsburgh-based U.S. Steel said Stelco’s Lake Erie and Hamilton plants would supply finishing facilities for flat-rolled steel -- used in the auto and appliance industries -- and tubular steel used mostly in the energy sector.

With the acquisition, U.S. Steel would become the world’s fifth-largest steel maker with production capacity of about 33 million net tons of raw steel annually, up from its current capacity of 26.8 million tons.

Stelco emerged from bankruptcy protection last year.

John Surma, U.S. Steel’s chairman and chief executive, said the acquisition would increase U.S. Steel’s ability to respond to market demands and customer needs.

Global steel makers have been consolidating in recent years to deal with competition, the need for major reinvestment in aging mills and new opportunities in Asia. Last year, U.S. Steel bought Texas-based Lone Star Technologies Inc., which makes welded pipe used in oil fields, for $2 billion.

Shares of U.S. Steel fell 38 cents to 93.01 on Monday.