A leading integrated steel producer headquartered in Pittsburgh, Pennsylvania, announced a joint venture partnership agreement under which it has taken the first step toward acquiring an Arkansas-based steel manufacturer.
Big River Steel, which operates a LEED-certified Flex Mill™ in northeast Arkansas, will expand U.S. Steel’s technological capability and geographic presence through this agreement. U.S. Steel has purchased 49.9% ownership interest with a call option to acquire the remaining 50.1% over the next four years.
The Big River flat-rolled mill has advanced technology that 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. 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.
“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.”
“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,” added Burritt. “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.”
“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 have always called ourselves a ‘technology company that just happens to make steel.’ In U. S. Steel, we have a likeminded technology-focused partner with an enduring tradition of excellence and a commitment to innovation. 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.”
Closing of the transaction is anticipated on October 31, 2019.
