US Steel has exercised its call option to acquire the remaining 51.1pc of Big River Steel (BRS) for about $774mn. The company noted in a recent media statement that it would complete the transaction by Q1 2021 depending on Antitrust approvals and other formalities.
US Steel acquired 49.9pc of Arkansas-based BRS in October 2019. This second step is part of the former’s strategic investment in the low-cost LEED-certified mini steel mill in Arkansas. Last month, BRS ignited the second electric-arc furnace (EAF) at this site, as part of its expansion to 3.3mn mt of steel per year by H1 2021. US Steel’s total investment in BRS now stands close to $1.5bn.
David B. Burritt, president and chief executive officer of US Steel, said that the acquisition will strengthen the company’s order books while BRS’ low-cost production methods will also help the steelmaker increase its profitability and operational efficiency. Both companies continue to serve the automotive industry in the US and Mexico.
The release also noted that BRS has already produced 11 grades of gen-3 US Steel products, including the XG3 high-strength grade. BRS’ production methods will also increase US Steel’s capability to produce green steel which meets future automotive standards and reduce the steelmaker’s global carbon footprint by 20pc. The acquisition is also expected to increase US Steel’s recycling rate, thanks to BRS’ EAF-intensive steelmaking.