The New York herald., 1922-05-12
BETHLEHEM MERGES
With LACKAWANNA
IN new STEEL DEAL
Wall Street Surprised by
Combine Involving $685.
682,892 Capital.
EACH is TO BENEFIT
Schwab Concern Gets Rail
and Merchant Mills, Be-
sides Ore and Coal.
HITS COMBINE OF SEVEN
Six Remaining Companies Will
Complete Union Despite
Buffalo Withdrawal.
HITS COMBINE OF SEVEN

Negotiations were completed yester.
day for a merger of the Bethlehem
Steel Corporation and the Lacka-
wanna Steel Company. involving a
total authorized stock capitalization
and bonded Indebtedness of s363,6S2,-
S92. Announcement of this step, which
was made by Eugene G. Grace, presi-
dent of the Bethlehem Steel Corpora
ton, surprised Wall Street, as well as
the big interests in the steel industry.
1t has been known for a long time
that negotiations had been on between
these TWO concerns, but when the
seven company merger. including
Lackawanna among others, got under
way, it was intimatcd that the Beth
lehem- Lac kawanna negotiations had
come to an end.
Wall Street saw in the announce
ment the result of shrewd trading by
the management of the Lackawanna
company, which was being sought by
both the Bethlehem company and by
the interests behind the seven COM
pany merger. The price the Bethle-
hem company will pay for Lacka.
wanna has not been made pubic, but
it is obvious that the terms were
more favorable than Lackawanna
could hope to obtain in the bigger
consolidation proposed.
Statement by Il. g. Grace.
The terms will be submitted TO the
boards OF the two corporations at sep
arate meetings on Tuesday. and after
their ratification will probably be made
public. The statement issued at Mr..
Grace's office was as follows:
r. G. Grace. president Of the Beth
lehem steel Corporation. Moses Tay-
lor, chairman OF the board of direc-
tors of the Lacka wanna Steel Com
pany. and the committee appointed
by it to deal with the matter. an
nounce that they have reached an
agreement as 10 terms to recommend
to their respective boards of directors
and stockholders for the purchase by
Bethlehem of the Lackawanna prop
use of Bethlehem per cent. pre-
ferred and class e common stock in
payment for the properties. The
details are being prepared for prompt
presentation to the stockholders OF
the respective companies.
-his coup by the Lackawanna inter-
ests, for as such 1t was regarded in Wall
Street. came as a surprise and somewhat
of a blow to the banking and industrial
interests trying TO effect merger OF
seven large independent steel companies
A lineup had been worked out weeks ago
that included Lackawanna IT was de-
cIared yesterday by those affiliated with
the bigger enterprise that the merger
would probably go through with the six
other companies. but II was apparent
that the progress of that deal had at
least been temporarily halted by the
change.
Two Merger Meetings Tuesday.
The six companies will get together
for their negotiations also on Tuesday
Of next week. The Importance of hay
ing the Lackawanna company In the
bigger consolidation lay in its large AMI
profitable rail mills. The rail business
has been about the most profitable OF
the entire industry in late months.
Obtaining control of the Lackawanna
company will provide the Bethlehem
with facilities for the manufacture OF
several important steel products not
heretofore included i'm its output Prin-
cipal among these Is ordinary CONNER
cial bars. II also gives the Bethlehem
company structural material and plates
for distribution in New England, as well
as valuable coal and ore properties.
When the consolidation is completed
the only products the organization viii
lack TO make well rounded steel plant
will be pipe and wire. II is believed
that the company will construct its own
tube and pipe plant along some original
lines II has In contemplation. II has
been reported that the Bethlehem com
pany is negotiating with the wickwire-
Spencer steel Corporation for that com
pany's assets. including important wire
plants. Mr.. Grace yesterday declined
to discuss this report.
ACQUISITION of the Lacka anna com
pany BY Bethlehem cannot be construed
as the absorption of a competitor. Mr..
Grace declared. While both concerns
make some of the same products. III,
market of Bethlehem II i'm the South
and East, he said. while Lackawanna
feeds the North and New England, The
addition OF the Lackawanna plants "a
the Bethlehem chain. he added. was log.
lcal in view OF the Bethlehem policy u
continuously building up it's organiza.
ton In the East. There is no intention
Of becoming a western producer or OF
entering any group Of western producers
Mr.. Grace added thus dsposing OF the
report that this consolidation with the
I.ackawanna WAS the first step toward
putting Bethlehem into the big merger
Of several Independent steel companies.
The Lackawanna Steel Company is
controlled by several big interests. in
cludmg among them Cornelius Wander
hit. the Picands- Mather Company, the
Ogden Mills estate and Moses Taylor.
IT will he necessary for the Bethlehem
Company to Issue new stock to exchange
for Lackawanna stock 70 complete The
deal and any financing M result
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