U.S. Steel Acquires 49.9% Stake in Big River Steel

SEATTLE (Scrap Monster): Pittsburgh-based U.S. Steel has reached an agreement with Osceola, Arkansas-based Big River Steel, by which it has acquired a minority ownership interest in the company.

According to the agreement, both the parties will form a joint venture under which U.S. Steel will hold 49.9% ownership interest in Big River Steel. In return, Big River Steel will receive $700 million in cash. Also, U.S. Steel will hold an option to acquire the remaining 50.1% stake within the next four years in accordance with an agreed-upon price formula. The agreement also clarifies on the future ownership structure of Big River, in case U.S. Steel chooses not to acquire the remaining stake during the specified timeframe.

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The transaction is likely to deliver significant strategic and financial benefits to U.S. Steel. Apart from strengthening the company’s competitive positioning, it will reshape the company’s footprint in the flat-rolled segment. In addition, the transaction is likely to complement U.S. Steel’s existing facilities and increase its overall profitability and cash flow generation. The deal is likely to deliver around $1 billion in capital and operational cash improvements by 2022.

David B. Burritt, President and Chief Executive Officer of U. S. Steel noted that the new partnership will bring together the capabilities of both integrated and mini mill steel production.

The transaction is expected to close on October 31, 2019, subject to customary closing conditions.