Armco Inc. has reached a definitive agreement to sell its Eastern Stainless Corp. subsidiary in Essex to the Swedish-based Avesta Sheffield AB, one of the world's largest stainless steel companies.
Terms of the purchase, which is expected to be completed in the next two months, were not disclosed. But Avesta Sheffield said when an agreement in principle was reached in October that it expected to pay about $27.1 million, according to Bloomberg Business News.
The sale is contingent on Avesta reaching a new labor agreement with the United Steelworkers of America, the union that represents most of the 280 workers at the stainless steel plant in southeastern Baltimore County, said Armco spokesman Jim Herzog.
The sale also must be approved next month by Eastern Stainless' shareholders, but that is assured because Armco owns 84 percent of the company's stock.
Once an independent company, Eastern Stainless has been losing money since the mid-1980s.
After filing for bankruptcy protection in 1986, it was bought by Cyclops Industries Inc., which in turn was acquired by Armco in 1992. Eastern Stainless' work force has declined from 1,500 in the early 1980s to its present level.
The sale will be for cash and the assumption of certain liabilities by Avesta.
After other liabilities are satisfied, there will be no assets remaining for distribution, Armco said, and individuals and groups that hold the remaining 16 percent of the stock will receive nothing from the sale.
The sale of Eastern Stainless will bring to an end Armco's 49-year presence in the Baltimore area.
The company in January completed the sale of its Biddle Street plant, which makes stainless steel bar, to Republic Engineered Steels Inc., a Massillon, Ohio-based stainless steel company. That plant employed 50 workers.