ArcelorMittal to buy Nippon Steel’s Alabama mill stake

Global steelmaker ArcelorMittal says it has entered into a conditional equity purchase agreement with Japan-based Nippon Steel Corp. (NSC) that would see ArcelorMittal purchasing NSC’s 50 percent interest in the two firms’ joint venture (JV) steel mill in Calvert, Alabama.

Referred to by ArcelorMittal as the AM/NS Calvert mill, that facility contains numerous downstream steel production lines (pickling, coating, galvanizing and hot strip making) and is in the midst of having a 1.5-million tons per year electric arc furnace (EAF) melt shop installed.

ArcelorMittal says the transaction has been entered into at the request of NSC pertaining to “regulatory concerns” stemming from its attempted acquisition of Pittsburgh-based United States Steel Corp.

Adds Luxembourg-based ArcelorMittal, “The transaction is subject to NSC completing its pending acquisition of U.S. Steel, which is subject to various other regulatory requirements.”

Under the terms of the agreement, ArcelorMittal will pay $1 consideration for the transaction and NSC “will inject cash and forgive partner loans” in an amount the companies estimate to be about $900 million.

“There are no assurances or guarantees that NSC will complete its acquisition of U.S. Steel,” says ArcelorMittal, adding, “Should NSC not complete its acquisition of U.S. Steel, then the agreement will not come into effect and the AM/NS Calvert JV will continue.”

The metals producer says the AM/NS Calvert mill was owned by Thyssen Krupp USA when the ArcelorMittal and NSC JV acquired it more than 10 years ago.

ArcelorMittal says the EAF melt shop being installed will be “integrated with ArcelorMittal’s HBI facility in Texas [to] enable Calvert to supply automotive customers with lower CO₂ embodied steel, melted and poured in the U.S.”

Adds the steelmaker “With more investments under consideration—a second EAF and a non-grain oriented electrical steels line—Calvert will continue to fulfil its critical role in supplying domestic manufacturing industries.”