Smart Deal in Iron

Into Wall Street last week leaked news of one of the biggest inter-company stock deals of 1942: the purchase by U.S. Pipe & Foundry Co. of 54,500 shares of Sloss-Shemeld Steel & Iron Co. common stock from Allied Chemical & Dye Corp. The rumored price: more than $4,300,000.

For two big reasons this transaction makes sense: 1) Allied Chemical disposes of an investment which has little relation to its normal business; 2) U.S. Pipe gets voting control (43%) of one of the top U.S. pig-iron producers with a 500,000-ton annual output.

All nosegays for this deal go to smart, up-from-the-ranks U.S. Pipe President Norman Felt Shelton Russell, who joined the company 33 years ago, has seen it grow from just another pipe producer to champion in its field. One of the first U.S. corporations to land war contracts, U.S. Pipe three years ago was selling millions of dollars worth of cast-iron water mains for Army camps, defense houses. Then Pipemaker Russell took on orders for shells, gun mounts, howitzer barrels, etc. Result: sales in 1941 jumped to a 15-year peak of $23,000,000; sales last year were still higher.

Now U.S. Pipe not only has plenty of iron, but it also has another source of revenue: based on Sloss-Sheffield's $6 annual dividend--U.S. Pipe will get $327,000 in 1943, almost 8% on its investment.

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