Monday, June 11, 2007

U.S. Steel Rises on Report of Talks With ThyssenKrupp

Shares of U.S. Steel Corp., the largest steelmaker based in the U.S., soared the most since November after Interfax said ThyssenKrupp AG is in talks to buy the company.

ThyssenKrupp, based in Dusseldorf, Germany, is interested in buying U.S. Steel or Russia's OAO Severstal, Interfax said, citing a banker it didn't identify. Pittsburgh-based U.S. Steel is the more likely target, the news agency said. ThyssenKrupp spokesman Klaus Pepperhoff declined to comment.

Acquiring U.S. Steel or Severstal would help ThyssenKrupp close the gap on Luxembourg-based Arcelor Mittal, the world's biggest producer. U.S. Steel, which has a market value of about $14.8 billion, would give ThyssenKrupp access to mills in North America and Europe and iron-ore mines in Minnesota.

``ThyssenKrupp has long had an interest in expanding in the U.S.,'' said Monica Bonar, an analyst at FitchRatings in New York. ``They would be most interested in the U.S. operations. U.S. Steel is a very good asset with a reasonable cost position and access to its own coke and iron ore, which are a key competitive advantage.''

U.S. Steel rose $9.25, or 8 percent, to $125.05 at 4:29 p.m. in New York Stock Exchange composite trading, the biggest gain since Nov. 17. The stock has doubled in the past year.

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