United States Steel Corporation has announced a joint venture partnership agreement under which it has taken the first step towards acquiring Big River Steel through the purchase of a 49.9% ownership interest, with a call option to acquire the remaining 50.1% 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, flat-rolled mill, the Flex Mill. "Big River's technological leadership allows it to produce a wide product spectrum, including advanced automotive steels and electrical steels, and provide high-quality products and services to customers in the automotive, energy, construction and agricultural industries," said a spokesperson. "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 CEO 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, "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."
"U.S. Steel's decision to partner with us through this investment in Big River is a decisive vote of confidence in our company, our vision and our people," said Dave Stickler, CEO of Big River. "After just over two years of operations, we have built a unique platform that features the most advanced technology in our industry, and the very finest steel technicians in the business. We are very excited about the possibility for what we can do together. As the newest steel production facility in North America, I could not be more proud to be partnering with a company started by Andrew Carnegie more than 118 years ago."
For more information contact:
United States Steel Corporation
600 Grant St., Ste. 6100
Pittsburgh, PA 15219
412-433-1121
www.ussteel.com