United States Steel Corporation announced that it has exercised its call option to acquire the remaining equity of Big River Steel for approximately USD 774 million from cash on hand. Big River Steel operates a LEED-certified Flex Mill in northeast Arkansas that is believed to be the newest and most advanced flat-rolled mill in North America. Big River Steel’s advanced manufacturing technology and skilled operators combined with US Steel’s product development capabilities and intellectual property have allowed Big River Steel to produce eleven advanced US Steel grades, including substrate for its XG3 grade of Generation 3 advanced high-strength steels. Big River Steel offers high quality products and services to discerning customers in the automotive, energy, construction, and agricultural industries. Big River Steel’s Phase II-A expansion doubled the mill’s hot-rolled steel production capacity to 3.3 million tons annually, establishing it as one of the largest electric arc furnace-oriented flat-rolled mills in North America. The Phase II-A expansion was completed in November of this year, ahead of schedule and below Big River Steel’s previously disclosed budget.
The transaction is expected to be immediately accretive to earnings with the potential for significant synergies to further support long-term value creation. The transaction is subject to satisfaction of customary closing conditions, including antitrust approval, and is expected to close in the first quarter of 2021.
Since its October 31, 2019, acquisition of a 49.9% ownership interest in Big River Steel, US. Steel has created strategic benefits, validating the strong strategic rationale expected to be realized upon full ownership of Big River Steel. Key accomplishments to date include:
Barclays is serving as exclusive M&A financial advisor, while PJT Advisers and Rothschild & Co are serving as financing advisors to US Steel on the acquisition, and Milbank LLP is providing legal counsel.