U.S. Steel Corp. to acquire Big River Steel
United States Steel Corporation, owner of operations in Granite City, has announced a joint venture partnership agreement under which it has taken the first step toward acquiring Big River Steel, an Arkansas company.
U.S. Steel will purchase of a 49.9 percent ownership interest at a purchase price of approximately $700 million in cash, with a call option to acquire the remaining 50.1 percent within the next four years. U. S. Steel has committed financing to execute the transaction. The implied enterprise value of Big River, including the expected completion of its Phase II-A expansion, which is fully funded and already under construction, is approximately $2.325 billion.
Big River operates a LEED-certified, Flex MillTM in northeast Arkansas that is described as the newest and most advanced flat-rolled mill in North America. Big River’s technological eadership allows it to produce a wide product spectrum, including advanced automotive steels and electrical steels, and provide high-quality products and services to discerning customers in the automotive, energy, construction and agricultural industries. Big River’s recently announced Phase II-A expansion is expected to double the mill’s hot-rolled steel production capacity to 3.3 million tons annually, establishing it as one of the largest EAF-based flat-rolled mills in North America.
“Our new partnership with Big River is designed to accelerate our strategy to offer our customers the ‘best of both’ by bringing together the capabilities of integrated and mini mill steel production,” said David B. Burritt, president and chief executive officer of U. S. Steel. “Big River operates the most advanced, state-of-the-art and sustainable mill in North America, and our investment would ultimately strengthen our competitive positioning in highly strategic steel-end markets, creating an unmatched value proposition for our stakeholders.”
Burritt continued, “We have been investing in leading technology and advanced manufacturing so that we can assemble a portfolio of competitive assets with distinct advantages to serve strategic markets to better position U. S. Steel to be an industry leader in delivering high-quality, value-added products. The investment in Big River, coupled with our announced investments at Mon Valley Works and Gary Works, would ultimately position U. S. Steel with three core market-leading, differentiated and technologically advanced assets that will enable us to compete with anyone, anywhere, for generations to come. Each of these locations would be able to focus on the products that each facility is best designed to produce. As an organization, we will be nimbler, more resilient and our teams will be more efficient. Collectively, these actions will help us continue to create long-term value for our stockholders, customers, employees and the communities in which we live and work.”
