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August 2006


OneSteel acquires Smorgon Steel

Australian steelmaker OneSteel Ltd. is acquiring Smorgon Steel Group Ltd. for $1.16 billion (Australian). OneSteel Chairman Peter Smedley said the takeover was a logical step for Australia’s steel industry in the face of intense competition from overseas steel producers.

“The transaction represents the next step in the restructuring of the Australian steel industry,’’ Smedley said in a statement. “It will further consolidate the sector, leading to a lower cost and more efficient steel industry from which to effectively compete in the world steel market for years to come.’’

Smorgon’s Board of Directors have unanimously recommended the One-Steel offer in the absence of a superior bid and scheduled a vote for October. The acquisition is also subject to approval from Australia’s antitrust regulator, the Australian Competition and Consumer Commission.

Under the proposed deal, Smorgon shareholders will receive a combination of OneSteel shares and cash to the value of $1.23 per share, a 31.8% premium over the average value of Smorgon shares.

Smorgon investors will receive 9 OneSteel shares for every 22 Smorgon shares. Smorgon’s directors have unanimously recommended the OneSteel offer in the absence of a superior bid.

OneSteel is a producer of steel products for the automotive and construction industries, making 1.7 million tons of steel a year and selling a total of 2.2 million tons a year of steel and metal products.

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