US Steel plans to dispose of its domestic railway operation, Transtar, to a subsidiary of Fortress Transportation and Infrastructure (FTAI) for $640mn. The companies expect to close the deal by Q3 202,1 subject to regulatory approvals.
US Steel will focus on its core steel production business and use the proceeds for strengthening its sales and revenue, according to a statement on Tuesday. The company will have a 15-year contract with FTAI to maintain the six railroads currently operational under Transtar in exchange for a minimum-volume commitment for the first five years, noted FTAI on Jun 8. The lines carry flat-rolled steel, bars, steel processors, scrap, and other finished and semi-finished goods across the Northern half of the US to and from US Steel plants.
The deal includes Gary Railways in Indiana, which operates 63 miles of rail also serves other major steel producers in the country. FTAI is an infrastructure equipment specialist with interests in rail, aviation, intermodal transportation, and energy. It has acquired $17bn in transportation assets since 2002.