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Published: Friday, 8/22/2003

Takeover causes little change at Chase Brass & Copper

BY JULIE M. McKINNON
BLADE BUSINESS WRITER

The rural Montpelier factory continues to employ about 300 people in operations that recently finished a more than $90 million, multi-year expansion. John Steadman remains in charge as president.

And Wall Street still applauds Olin Corp.'s purchase of the former Chase Industries Inc., acquired by the much larger Norwalk, Conn., company last September in a $164 million stock-for-stock deal. Olin, maker of Winchester ammunition and a range of other products, had $1.3 billion in revenues last year.

“So far, it seems to have been a wonderful acquisition,” said John Roberts, an analyst with Buckingham Research Group in New York.

Shortly before Toledo's Dana Corp. and ArvinMeritor Inc. of Troy, Mich., began talking about forming a joint venture with some replacement-part operations - discussions that would fizzle but lead two years later to the Michigan parts supplier's unsolicited $4.6 billion attempt to acquire its larger rival - Chase Industries was a hostile takeover target itself.

Chase Industries fought off a $10.50-a-share bid in 2001 from its largest shareholder, Citicorp Venture Capital Ltd., and Olin was the company's initially unidentified “white knight,” offering $12 to $13 a share with some contingencies. That first deal, however, fell through because of economic changes and an inability to reach an agreement with Citicorp, Olin divulged last year in a filing with the U.S. Securities and Exchange Commission.

The Chase Industries acquisition allowed Olin to get back into making brass rods, a market it had previously exited after a small Indianapolis plant it operated couldn't compete. Olin, though, continues to face problems with soft demand from manufacturers for brass rod and other metal products, it has said.

This year, Olin closed a 200-employee Indianapolis strip mill that made sheet and strip products from brass and copper. Production was consolidated in the company's East Alton, Ill., factory.

“The [metals] market is indeed soft, and that is having an effect on all of our operations, not just Chase,” said company spokesman Ann Pipkin.



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