U.S. Steel Announced Strategic Sale of Non-Core Asset

SEATTLE (Scrap Monster): Pittsburgh-based integrated steelmaker United States Steel Corporation (U.S. Steel) announced that it has decided to sell its subsidiary Transtar, LLC for $640 million. The buyer is an affiliate of Fortress Transportation and Infrastructure Investors LLC. The transaction is expected to close during the third quarter of the current year, subject to customary closing conditions, including certain regulatory approvals.

The company will benefit from the long-term contract to maintain the existing operations at Transtar’s six operating railroads. The monetization of the non-core asset would bring immediate incremental value to its shareholders. Moreover, it will align the company’s focus on its core mining and steelmaking businesses. The proceeds of the sale would be utilized to further strengthen the company’s balance sheet, U.S. Steel press release noted.

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David B. Burritt, U. S. Steel President and Chief Executive Officer noted that the sale of Transtar to an experienced railroad operator will help the company to better focus on its broader Best for All strategy. The sale has monetized its railroad assets at an implied multiple well above its existing valuation, he added.

U. S. Steel’s exclusive financial advisor on the transaction was Citi. Also, Jones Day and Baker & Miller PLLC acted as legal advisors.