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Ispat International N.V. Reaches an Agreement in Principle With Usinor For the Acquisition of Unimetal, Trefileurope and SMR.

ROTTERDAM, Netherlands, May 14 /PRNewswire/ -- Ispat International N.V. (NYSE: IST; Amsterdam: IST NA), the world's most global steel producer, today announced that it has reached an agreement in principle with Usinor to acquire Unimetal, Trefileurope, SMR (Societe Metallurgique de Revigny), and their related subsidiaries (collectively "the companies"). The execution of the sale purchase agreement is subject to the consultation of the Unimetal Workers' Committee, in accordance with French law. Both parties intend to close the transaction by 30th June 1999, subject to certain regulatory approvals.

Under this agreement, the total consideration of the transaction is FF653 million (Euro 99.5 million, US $106.9 million) of which Ispat International will immediately pay FF130 million (Euro 19.8 million, US $21.3 million). The balance will be paid in 14 equal semi-annual installments at an interest charge of Euribor plus 1%. Usinor is also representing that the net working capital position of the companies on the date of closing will be at the level as on the 31st of December 1998, which was FF1,064 million (Euro 162.2 million, US $174.1 million). Any increase or decrease in the net working capital amount will result in an increase or decrease in the total purchase consideration.

Ispat International will also acquire a portion of the assets and personnel of Usinor's Long Product Research & Development facilities, until now known as CREAS, thereby gaining a significant level of long product development expertise.

Lakshmi N. Mittal, the Chairman and Chief Executive Officer of Ispat International N.V. said, "The proposed acquisition of Unimetal, Trefileurope and SMR will allow us to offer a complete range of sizes and grades of high quality long products, and improved customer service to our growing customer base in Europe, thereby strengthening our market leadership in this segment. There are also a number of marketing, distribution, as well as operating synergies resulting from our different operations, in particular Ispat Germany, that will enable us to improve the quality of products as well as reduce the cost of production at these companies."

It was also announced that a new regional hub for Ispat International's European operations will be formed in Luxembourg to co-ordinate the technical and commercial activities of the Company's European operations. Mr. Malay Mukherjee will be the President and CEO of this hub, which will be named Ispat Europe, and will take up his new appointment effective June 1, 1999. Mr. Mukherjee is currently the Managing Director of Ispat Karmet in Kazakhstan, which has been successfully turned around since its privatization in 1995. Ispat Karmet is a privately owned member of The LNM Group, and one of the world's largest, single-site, integrated steelmaking producers.

Together, Unimetal, Trefileurope and SMR manufacture and sell worldwide approximately 1.5 million tons of blooms, billets, bright bar, bar in coil, wire rods and wire products. The consolidated audited sales and EBITDA for 1998 is approximately FF4.5 billion (Euro 686 million, US $736.5 million) and FF136 million (Euro 20.7 million, US $22.3 million), respectively.

For further information, visit Ispat International's web site at: .


Unimetal S.A.

Unimetal is a 100% owned subsidiary of Usinor, Europe's largest steelmaker. Historically, Unimetal is a producer of a wide range of carbon long products. Today, the company produces 1.43 million tons of steel for a wide range of grades of carbon long products, which it also supplies to customers in the automotive, appliance and engineering industries. The company is one of Europe's highest quality producers of long products for cold heading, wire drawing and forging in the form of wire rods, bars and billets.

Trefileurope S.A.

Trefileurope, a subsidiary of Unimetal, is one of the European leaders in wire drawing and fabricating and currently has ten manufacturing facilities in France, Belgium and Italy. The company shipped 350,000 tons of steel products to customers in Europe, as well as to export markets during 1998.

SMR S.N.C. (Societe Metallurgique de Revigny)

SMR, a subsidiary of Unimetal, is the European leader in bright bar drawing activities for free-cutting steels and high quality special steels. The company produces approximately 100,000 tons of steel products, which it supplies mainly to customers in Europe.

Ispat International N.V.

Ispat International is the only truly global steel producer in the world. The company is one of the lowest cost steel producers and the largest producer and consumer of Direct Reduced Iron in the world. It has over 15,000 employees and manufactures a broad range of semi-finished and finished flat and long steel products at its steelmaking operations in the US, Mexico, Trinidad, Canada, Germany and Ireland. Ispat International has increased its steelmaking capacity by acquisition and internal investmant, and as a result shipments have increased from approximately 1.5 million tons in 1992 to 10.8 million tons in 1998. The Company's net sales totaled $3.5 billion in 1998. Ispat International is a member of The LNM Group, the world's 4th largest steel producer, which has privately owned steelmaking operations in Kazakhstan (Ispat Karmet) and Indonesia (Ispat Indo).

Mr. Malay Mukherjee

Mr. Mukherjee is currently the Managing Director of Ispat Karmet, a privately owned member of The LNM Group. Mr. Mukherjee has approximately 25 years of experience in a variety of technical and commercial functions in the steel industry and has held various senior management positions within the Company, including Managing Director of Ispat Mexicana. He is a recipient of the MECON Award from the Indian Institute of Metals.

*Direct Reduced Iron -- Electric Arc Furnace -- Continuous Casting Method.
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Publication:PR Newswire
Geographic Code:4E
Date:May 14, 1999
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