Filed by Companhia Siderurgica Nacional
under its name translated into English: National Steel Company
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Wheeling-Pittsburgh Corporation
Commission File No.: 000-50300
On October 25, 2006, Companhia Siderurgica Nacional issued the
following joint press release with Wheeling-Pittsburgh Corporation concerning
the proposed strategic alliance between Companhia Siderurgica Nacional and
Wheeling-Pittsburgh Corporation. The following press release contains forward
looking statements as discussed more fully below.
FOR IMMEDIATE RELEASE
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WHEELING-PITTSBURGH CORPORATION AND
COMPANHIA SIDERURGICA NACIONAL ANNOUNCE DEFINITIVE AGREEMENT
WHEELING, WV and SAO PAOLO, BRAZIL, October 25, 2006 - Wheeling-Pittsburgh
Corporation (NASDAQ: WPSC) and Companhia Siderurgica Nacional (NYSE: SID) today
announced that they have entered into a definitive agreement in which
Wheeling-Pittsburgh will acquire the North American assets of CSN, creating a
strong, well-capitalized steel producer with a more flexible cost structure,
broader value-added product offering, access to CSN's product and process
technology, and significant long-term earnings potential. The definitive
agreement reflects the strategic arrangement announced on August 3, 2006.
James G. Bradley, Chairman and Chief Executive Officer of Wheeling-Pittsburgh
stated, "This merger agreement marks a new beginning for steelmaking at
Wheeling-Pittsburgh and in the Ohio and Monongahela valleys. We are confident
that the agreement positions Wheeling-Pittsburgh to deliver sustainable earnings
as well as solid future cash flows. CSN is a world-class, fully integrated steel
producer with impressive margins and an enviable cash flow, and we look forward
to partnering with them as we take Wheeling-Pittsburgh to the next level."
Under the terms of the agreement, CSN will contribute its modern steel
processing facility in Terre Haute, Indiana with current annual pickled and
oiled, cold rolled and galvanized products of 1 million tons, provide
Wheeling-Pittsburgh exclusive U.S. and Canadian distribution rights for CSN's
flat-rolled steel products and commit to a ten-year slab supply agreement, which
will provide a long-term, guaranteed supply of high-quality slabs on favorable
payment terms.
CSN will also contribute $225 million in cash through the issuance by the
combined company of a convertible debt security that, with the consent of the
United Steelworkers, can be converted into equity in three years. Of the $225
million, approximately $150 million will be used for transformative capital
improvements - $75 million to build a new energy-efficient furnace that would
increase Wheeling-Pittsburgh's hot strip mill capacity to 4 million tons, and
the balance to add a second galvanizing line at Terre Haute. The remaining $75
million will be used to enhance the combined company's liquidity position.
Marcos Lutz, Managing Director for Infrastructure and Energy, CSN, said, "This
transaction will combine CSN's modern North American assets, capital, slab
supply and management expertise with Wheeling-Pittsburgh's production
capabilities to benefit all of our North American stakeholders - shareholders,
employees, customers and the communities of which we are a part. Together, we
will create an integrated, value-added production chain that will result in a
more flexible cost structure, broader value-added product offerings and
significant incremental earnings potential."
This agreement marks the culmination of an extensive process by
Wheeling-Pittsburgh involving a number of potential suitors, as well as the
United Steelworkers. In accordance with an agreement reached in September
between the Company and the USW, the USW had until October 15, 2006 to submit a
bid or assign its right to a designee. No such bid or designation has been made
by the USW.
Upon completion, the existing Wheeling-Pittsburgh Corporation as well as CSN's
operating subsidiary in Terre Haute will become wholly owned subsidiaries of a
new holding company, which intends to seek a North American stock exchange
listing. A new Board of Directors will be created, which will include Mr.
Bradley as Chairman, two USW directors, five independent directors, and three
directors designated by CSN. Wheeling-Pittsburgh's current shareholders will
receive 50.5% of the combined company. The remaining 49.5% will be held by CSN,
which may increase its ownership to 64% upon conversion of the $225 million
debt.
Bradley concluded, "Our Board has demonstrated its open-mindedness in creating
value for our shareholders and has repeatedly shown its commitment to evaluating
all strategic options, including remaining independent. The Board has concluded
that the combination with CSN represents a compelling opportunity at this time.
We will continue to engage in a productive dialogue with our shareholders and
welcome further input as we work constructively through the merger process."
The Company and CSN expect to file a preliminary proxy statement and prospectus
regarding the CSN transaction with the SEC as soon as possible.
The Company's Annual Meeting of Shareholders to elect its Board of Directors is
scheduled for November 17, 2006 at the White Palace in Wheeling, WV. In
addition, the Company expects to hold a Special Meeting of Stockholders in
January 2007 to vote on the proposed transaction with CSN.
In addition, effective October 25, 2006, the Company has terminated its "poison
pill" provision that was adopted in February 2005.
# # #
The information contained in the foregoing press release, other than historical
information, consists of forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
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Act. In particular, statements containing estimates or projections of future
operating or financial performance are not historical facts, and only represent
a belief based on various assumptions, all of which are inherently uncertain.
Forward-looking statements reflect the current views of management and are
subject to a number of risks and uncertainties that could cause actual results
to differ materially from those described in such statements. These risks and
uncertainties include, among others, factors relating to (1) the risk that the
businesses of CSN Holdings Corp. and Wheeling-Pittsburgh will not be integrated
successfully or such integration may be more difficult, time-consuming or costly
than expected; (2) the ability of CSN, CSN Holdings and Wheeling-Pittsburgh to
realize the expected benefits from the proposed strategic alliance, including
expected operating efficiencies, synergies, cost savings and increased
productivity, and the timing of realization of any such expected benefits; (3)
lower than expected operating results for Wheeling-Pittsburgh for the remainder
of 2006 or for the strategic alliance; (4) the risk of unexpected consequences
resulting from the strategic alliance; (5) the risk of labor disputes, including
as a result of the proposed strategic alliance or the failure to reach a
satisfactory collective bargaining with the production employees; (6) the
ability of the strategic alliance to operate successfully within a highly
cyclical industry; (7) the extent and timing of the entry of additional
competition in the markets in which the strategic alliance will operate; (8) the
risk of decreasing prices for the strategic alliance's products; (9) the risk of
significant supply shortages and increases in the cost of raw materials,
especially carbon slab supply, and the impact of rising natural gas prices; (10)
rising worldwide transportation costs due to historically high and volatile oil
prices; (11) the ability of the strategic alliance to complete, and the cost and
timing of, capital improvement projects, including upgrade and expansion of
Wheeling-Pittsburgh's hot strip mill and construction of an additional
galvanizing line; (12) increased competition from substitute materials, such as
aluminum; (13) changes in environmental and other laws and regulations to which
the strategic alliance are subject; (14) adverse changes in interest rates and
other financial market conditions; (15) failure of the convertible financing
proposed to be provided by CSN to be converted to equity; (16) changes in United
States trade policy and governmental actions with respect to imports,
particularly with respect to restrictions or tariffs on the importation of
carbons slabs; and (17) political, legal and economic conditions and
developments in the United States and in foreign countries in which the
strategic alliance will operate. There is no guarantee that the expected events,
trends or results will actually occur. The statements are based on many
assumptions and factors, and any changes in such assumptions or factors could
cause actual results to differ materially from current expectations. CSN, CSN
Holdings and Wheeling-Pittsburgh assume no duty to update forward-looking
statements. Reference is made to a more complete discussion of forward-looking
statements and applicable risks contained in CSN's and Wheeling-Pittsburgh's
filings with the SEC.
The foregoing shall not constitute an offer of any securities for sale. If and
when definitive documentation for the proposed strategic alliance is completed,
the proposed strategic alliance will be submitted to Wheeling-Pittsburgh
Corporation stockholders for their consideration. CSN Holdings will file a
registration statement with the SEC, containing a preliminary proxy statement of
Wheeling-Pittsburgh Corporation and a preliminary prospectus of CSN Holdings and
other relevant documents concerning the proposed strategic alliance.
Stockholders of Wheeling-Pittsburgh are urged to read the registration statement
and the definitive proxy statement/prospectus, and any other relevant documents
filed with the SEC, if and when they become available, as well as any amendments
or supplements to those documents, because they will contain important
information. You will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing information about CSN,
CSN Holdings and Wheeling-Pittsburgh, at the SEC's website at www.sec.gov.
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CSN and CSN Holdings and their respective directors, authorized persons,
executive officers and other employees may be deemed to be participants in the
solicitation of proxies from the stockholders of Wheeling-Pittsburgh in
connection with the proposed strategic alliance. Information about the directors
and executive officers of CSN is set forth in CSN's Annual Report on Form 20-F
for the 2005 fiscal year, as filed on July 3, 2006. CSN and its directors,
authorized persons and executive officers do not own any shares of WPC.
Additional information regarding the participants in the proxy solicitation and
their respective interests may be obtained by reading the proxy
statement/prospectus regarding the proposed strategic alliance if and when it
becomes available.