U.S. Steel Completes First Tranche of Investment in Big River Steel

SEATTLE (Scrap Monster): Pittsburgh-based United States Corporation (U.S. Steel) announced that it has completed acquisition of 49.9% ownership interest in Big River Steel. Thi sis considered as the initial step towards acquiring full ownership in the company, as the deal provides an option for the company to acquire the remaining 50.1% stake with a period of four years, in accordance with an agreed-upon price formula.

The acquisition of the minority stake is for approximately $700 million, implying an enterprise value of $2.325 billion. The transaction, announced on October 1, 2019, had received positive response from its stakeholders. The financial implications of the acquisition will be reflected in the company’s Q4 2019 results onwards.

David B. Burritt, President and Chief Executive Officer of U. S. Steel stated that the completion of the strategic investment brings the company one step closer to creating a differentiated, world-competitive company. The company regards the investment in the newest and most advanced flat-rolled mill in North America as an investment in the future of U.S. Steel, he said. U.S. Steel will now focus on implementing the next phase of its strategy in collaboration with the new partners at Big River.

Apart from strategic benefits, the deal is likely to deliver significant financial benefits to the company. It is projected to deliver around $1 billion in capital and operational cash improvements by 2022.