United States Steel Corporation purchases $700M stake in Big River Steel

Pittsburgh’s United States Steel Corporation (U.S. Steel) announced Tuesday a joint venture partnership agreement under which, the company said, it has taken the first step towards acquiring Big River Steel.

Under the joint venture partnership agreement, U.S. Steel purchased a 49.9 percent ownership interest in Big River at a purchase price of approximately $700 million in cash, with a call option to acquire the remaining 50.1 percent within the next four years.

U.S. Steel has committed financing to execute the transaction. The implied enterprise value of Big River, including the expected completion of its Phase II-A expansion, is approximately $2.325 billion.

Big River operates an advanced, LEED-certified Flex Mill in northeast Arkansas. Big River produces a wide range of products, including advanced automotive steels and electrical steels. The recently announced Phase II-A expansion is expected to double the mill’s hot-rolled steel production.

“Our new partnership with Big River is designed to accelerate our strategy to offer our customers the ‘best of both’ by bringing together the capabilities of integrated and mini mill steel production,” David B. Burritt, president and CEO of U.S. Steel, said. “Big River operates the most advanced, state-of-the-art, and sustainable mill in North America, and our investment would ultimately strengthen our competitive positioning in highly strategic steel-end markets, creating an unmatched value proposition for our stakeholders.”

U.S. Steel also announced in May that it would invest more than $1 billion to construct a sustainable endless casting and rolling facility at its Edgar Thomson Plant in Braddock, Pa., and a cogeneration facility at its Clairton Plant in Clairton, Pa.