Armco Inc. and Cyclops Industries, Inc., both manufacturers of stainless steel, today announced an agreement in principle for Cyclops to merge with a new wholly-owned subsidiary of Armco. Under the agreement, Armco would pay $22 a share or approximately $156 million for the 7.1 million outstanding shares of Cyclops common stock. To fund a portion of the merger cost, Armco also announced an agreement in principle with New York-based Alleghany Corp., a financial services company and a substantial Cyclops stockholder, to sell Alleghany $100 million of a new Armco 10 percent convertible preferred stock.
Both Armco and Cyclops have operations in Baltimore. Lee Bland, an Armco spokesman, said the merger would not affect the local companies, which make different kinds of stainless steel products.
Eastern Stainless Corp., a subsidiary of Cyclops, makes stainless plate at a plant on Rolling Mill Road. Baltimore Specialty Steels Corp., a subsidiary of Armco, makes stainless bar rod and wire, at a plant on Biddle Street.