Sweden's SSAB wants to sell Ipsco tube unit--paper

STOCKHOLM Tue May 29, 2007 6:36pm EDT

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STOCKHOLM May 30 (Reuters) - Sweden's specialty steel producer SSAB (SSABb.ST), which is bidding for Canadian-U.S. steel pipe maker Ipsco IPS.TO, intends to sell Ipsco's steel tube division if the deal goes through, Swedish business daily Dagens Industri late on Tuesday reported a source as saying.

The paper said on its Web site that a sale of the unit could bring SSAB near 25 billion Swedish crowns ($3.65 billion).

"A divestment of the tube division has the result that the management of the new SSAB can focus on, and lay all their energy on developing and strengthening the firm's leading global position within its leading products steel sheet as well as steel plate," the paper quoted the "well placed" source as saying.

The paper said that SSAB hopes to sell the division before year-end.

The two firms said at the beginning of May that SSAB had signed a deal to buy Ipsco for $7.7 billion in one of the largest acquisitions by a Swedish company, and that they expect to close the deal in the third quarter this year.

The deal must be accepted by two-thirds of Ipsco's shareholder votes and by regulators.

Ipsco makes steel tubes and plate with an annual capacity of 4.3 million tons from four steel mills and 11 pipe mills.

The global steel industry has seen a wave of consolidation as producers bulk up to gain more sway over customers and suppliers in a booming steel market.

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