ACME STEEL SHAREHOLDERS WILL VOTE
TO CREATE NEW PARENT COMPANY, OPERATING SUBSIDIARIES
RIVERDALE, Ill., Dec. 19 /PRNewswire/ -- The Acme Steel Company (NASDAQ-NMS: ACME) intends to submit a proposal to shareholders to form a new parent company, Acme Metals, Incorporated. Shareholders are expected to vote on the proposal at the company's annual meeting scheduled for May 5, 1992, in Chicago.
If shareholders approve the proposal, shares of the present Acme Steel Company will be converted into shares of Acme Metals, Incorporated. Under the new organization the parent company would have four distinct operating subsidiaries.
"We consider this a necessary and evolutionary step in Acme's growth," explained Brian W.H. Marsden, president and chief executive officer.
"In 1986, when Acme was formed following a reorganization of Interlake, Inc., the company had sales of $240 million and manufactured two principal product lines: flat-rolled steel and steel strapping," Marsden pointed out.
"Since then," he added, "our sales have nearly doubled, and our downstream integration strategy has led us to acquire two subsidiaries, one in auto and light truck jacks and one in welded steel pipe and tube product lines."
As a result of this growth and diversification, Acme's original structure is no longer appropriate for the company, Marsden pointed out.
"The new organization structure will allow each of our four business units to more effectively serve the needs of their own customers and compete more effectively in their markets," Marsden noted. "This," he added, "should provide additional incentives for each business unit to continue the growth Acme has enjoyed."
"We believe that this change will also advance Acme's two-pronged strategy of modernizing its core steel operations and acquiring downstream users of that steel. At present, Acme's steel strapping, welded steel pipe and tube, and auto and light truck jack operations each obtain a major share of the steel they use, at competitive cost, from Acme's own steel operations and we certainly expect that to continue," Marsden said.
"With four strong-standing businesses in place, management at the new corporate parent can concentrate on planning and implementing growth for the company in an ever-changing business environment," he added.
The first step, which does not require shareholder approval, will be the transfer of Acme's steel strapping operations to a new subsidiary, Acme Packaging Corp. The transfer will take place at year-end 1991.
Following shareholder approval, the business units of Acme Metals, Incorporated, will be:
-- Acme Steel Company, a fully integrated producer of iron and steel, with plans in Chicago and Riverdale, Ill.
-- Acme Packaging Corp., a leading producer of steel strapping and strapping tools, with plants in Riverdale, Ill.; New Britain, Conn.; Leeds, Ala.; and two plants in Pittsburg, Calif.
-- Alpha Tube Corp., a leading manufacturer of welded steel pipe and tube, with three plants in the Toledo, Ohio, area.
-- Universal Tool & Stamping, Inc., the nation's leading manufacturer of jacks for automobiles and light trucks, with a manufacturing plant in Butler, Ind.
"The new Acme Metals, Incorporated, will continue to be a family of interrelated businesses, and we expect to retain the substantial synergies that exist among them," Marsden noted.
"We're confident our shareholders, our customers, our employees, our suppliers and our communities will recognize the opportunities this new organization presents to Acme," he noted.
The Acme Steel Company is a fully integrated producer of steel, steel strapping and strapping tools, welded steel pipe and tube, and automotive and light jacks. Its common stock is traded on the NASDAQ National Market System.
/CONTACT: Charles Nekvasil of Acme Steel, 708-849-2500/
(ACME) CO: Acme Steel Company ST: Illinois IN: MNG SU: RCN SH -- NY010 -- 3737 12/19/91 09:11 EST