Shareholders of Canada’s Algoma Steel approved the C$1.85 billion ($1.74 billion) sale of the company to Essar Steel Holdings Ltd at a special meeting today. The deal received 82.6 per cent approval from shareholders and clears the way for a subsidiary of Essar Global to buy all of Algoma’s outstanding shares for C$56.00 each.Algoma said it expects the deal to be completed by June 18, and that its shares will be removed from the Toronto Stock Exchange shortly after. The deal with Essar Steel surfaced in mid-April, a month after Salzgitter AG of Germany walked away from a potential takeover of Algoma. Algoma is one of a group of Canadian steelmakers that have been snapped up in a frenzy of deals involving foreign buyers that are looking to boost their influence over customers and suppliers as demand for steel grows.Hamilton, Ontario-based Stelco, the last of the big Canadian-owned steelmakers, put itself up for sale on June 1. Its Hamilton neighbour, Dofasco, was sold last year. Two others, Ipsco Inc and Harris Steel, agreed to be bought earlier this year.Sault Ste Marie, Ontario-based Algoma had been considered a prime target for a bidding war for some time given its small size on the global market and sound financial health after two stints in creditor protection since the early 1990s. The company shipped 2.4 million tonne (mt) of steel last year and generated net income of C$221.8 million, or C$6.06 a share.Algoma put itself up for sale in 2005 but abandoned the plan later that year. The deal with Essar will allow Algoma to speed up its plans for capital upgrades.Algoma CEO Denis Turcotte said that Essar will spend C$500 million in capital upgrades that Algoma had been considering for the past 18 months. “Essar felt very supportive of them and if anything just felt we should accelerate those plans,” said Turcotte. “So what was to us going to be a five-year, potentially seven-year, major capital programme, they want to accelerate and do within three to five years.”
