U.S. Steel Corporation announced December 8 that it would purchase the remaining equity of Big River Steel Co. for $774 million in cash after ending November 2020 with about $2.9 billion in liquidity, $1.7 billion in cash.
The deal, which is set to close in the first quarter of 2021, will combine U.S. Steel’s blast furnaces and steel intellectual properties with Big River Steel’s modern electric arc furnace (EAF) technologies and “mini mill” operations into the same company. U.S. Steel, in a statement, said this would expand U.S. Steel’s talent pool and make the overall company more competitive.
David B. Burritt, CEO of U.S. Steel, called the purchase “the cornerstone of our ‘Best of Both’ strategy” and said it would allow his company to “offer customers the high performance, innovative steel products they expect from U.S. Steel’s scientists and application engineers made through a state-of-the-art, environmentally sustainable and efficient mini-mill process.”
On a conference call December 8, Burritt held up the deal as part of the company’s process in modernizing its operations. “In one year, we have gone from zero EAFs in our footprint to now having three of the newest and most advanced EAFs in North America,” he said.
Big River Steel CEO David Stickler said he was “proud” of what his company has achieved, including the country’s only LEED certified steel mill, and said U.S. Steel “shares our vision.”
“Being an entrepreneurial disrupter is in our DNA and I’m excited about the possibilities we have already demonstrated by leveraging U.S. Steel’s industry-leading research and development capabilities,” he said.
In support of the purchase, the companies said that U.S. Steel’s almost-50%-ownership of Big River Steel has already led to strategic benefits, including enabling Big River Steel to produce more grades of steel, including U.S. Steel proprietary grades. The companies anticipate that, together, Big River Steel will also enable U.S. Steel to cut down on greenhouse gas emissions using its own sustainable steelmaking technology.
Burritt also noted that the deal would enable U.S. Steel better access to competitive steel markets in the southern U.S. and Northern Mexico.