Nucor announces acquisition of Alabama hollow steel business

SEATTLE (Scrap Monster): Nucor Corporation has announced its decision to acquire Birmingham, Alabama-based Southland Tube, an independent manufacturer of hollow structural section (HSS) steel tubing. The acquisition deal is worth $130 million and is expected to further strengthen the company’s product portfolio and enhance its downstream business.

John Ferriola, Chairman, CEO and President of Nucor noted that Southland Tube currently enjoys third largest market share in hollow structural section tubing. The acquisition of the company is an excellent fit for the Nucor family as it complements the company’s recent acquisition of Independence Tube in the HSS steel tubing market. The purchase of the business will help Nucor to leverage its capabilities and strengths. Further, the acquisition will result in expansion of the company’s product portfolio, Ferriola added. According to market participants, the addition of Birmingham steel tubing capacity will further differentiate Nucor from its steel competitors.

Southland Tube is a manufacturer of hollow structural section steel tubing, which is used in nonresidential construction, infrastructure and heavy equipment end-use markets. The company has one facility located in Birmingham. The facility employs 280 workers and ships nearly 240,000 tons of HSS per annum.

Earlier in November this year, the company had announced that it has closed on its acquisition of Independence Tube Corporation for approximately $435 million. With nearly 335 employees on roll, Independence Tube Corporation had the second highest market share in HSS. Through the acquisition, Nucor had added four manufacturing plants in Illinois and Alabama.

In July, Nucor had announced that it has reached an agreement with Joy Global Inc. to acquire its steel plate mill in Longview, Texas for a sum of nearly $29 million. The acquisition of the Texas mill was boasted as a valuable addition to the company’s plate product offerings. According to the company it complemented the capabilities of its two existing plate mills in North Carolina and Albama. The acquired mill had an annual production capacity of 180,000 tons and mainly manufactured specialty carbon and alloy plate products with thickness ranging from 1 to 12 inches and width up to 138 inches.

In June, the North Carolina-headquartered steel producer had signed a 50:50 joint-venture deal with Japanese JFE Steel Corp to build a new steel plant in central Mexico, aimed at producing around 400,000 tons per year of galvanized sheet steel, to be supplied mainly to Mexican automotive market. The joint venture was announced with the aim to tap the growing automotive demand in North America.

Recently, Nucor had announced plans to add an additional cold mill at its Nucor Steel Arkansas division. The expansion is expected to expand Nucor's capability to produce advanced high-strength, high-strength low-alloy, and motor lamination steel products. The $230 million expansion is expected to be completed in about 2 years.

About Nucor Corporation

Nucor Corporation is the largest steel producer in the United States and is the largest "mini-mill" steelmaker. Nucor is North America's largest recycler of any material and recycled 16.9 million tons of scrap in 2015. The company manufactures steel and steel products. The Company also produces direct reduced iron (DRI) for use in the Company’s steel mills. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI. Nucor operates in three segments: steel mills, steel products and raw materials.