Is AK heading to Arcelor Mittal fold?

The Web site of the London-based Financial Times newspaper is reporting that Arcelor Mittal is preparing a bid for Ohio's AK Steel Co.

The online report indicates that the European steel giant is preparing an offer of up to $40 per share for the 100-year-old Middletown, Ohio-based steelmaker.

AK produces both carbon and stainless steel, as well as some other specialty steels, at seven mills in Ohio, Indiana, Kentucky and Pennsylvania.

Neither company has commented on the accuracy of the report.

For its quarter ending March 31, 2007, AK Steel reported net income of $63 million on net sales of a record $1.8 billion worth of shipments of 1.6 million tons of steel.

The company's first-quarter 2007 operating profit was $120 million, or $75 per ton, a four-fold increase from the $29.4 million, or $19 per ton, AK Steel generated in the first quarter of 2006.

Operating profit for the first-quarter of 2007 was affected by a pre-tax, non-cash pension curtailment charge of $15.1 million related to a new labor agreement for the company's Mansfield, Ohio mill.

"True to our approach for all of 2007, in the first quarter, AK Steel 'put the pedal to the metal' with record performances in safety, quality, productivity and revenues," AK Steel CEO James L. Wainscott remarked when the results were announced. "We are beginning to experience the very positive effects of a strong market and new labor agreements at all of our plants, as well as our relentless cost and debt reduction initiatives, and we're taking that momentum into the second quarter," Wainscott said in a statement.

Arcelor Mittal is the world's largest steel company, with 320,000 employees in more than 60 countries. It produces steel for the automotive, construction, household appliances and packaging sectors.