Nucor acquires majority ownership of California Steel Industries
CHARLOTTE, North Carolina, December 13, 2021 / PRNewswire / – Nucor Corporation (NYSE: NUE) today announced that it has entered into agreements to acquire a controlling stake in California Steel Industries, Inc. (CSI) by purchasing a 50% stake from a subsidiary of Vale SA (Vale) and a 1% stake in the capital of JFE Steel Corporation (JFE). The company will be a joint venture between Nucor and JFE, pending regulatory approvals. Nucor will pay a cash purchase price to Vale of $ 400 million for enterprise value of 50%, adjusted for net debt and working capital at closing, which approximates less than 6.0 x historical average EBITDA.
âThe acquisition of a controlling interest in California Steel Industries expands our geographic reach into sheet steel and gives us a strong presence on the West Coast,â said Leon Topalian, President and CEO of Nucor Corporation. âThis acquisition will expand our portfolio of value-added sheet metal products, provide opportunities for increased internal shipments and allow us to supply our downstream businesses in the region, such as Verco and Hannibal Industries, with sheet metal products from steel. We look forward to continuing to grow with our partners at JFE. “
CSI is a flat rolled steel transformer capable of producing over two million tonnes of finished steel and steel products per year. The company has five product lines including hot rolled, pickled and oiled, cold rolled, galvanized and ERW tubes. The main end-use segments served by CSI include customers in the construction, service center and energy industries. CSI employs over 800 full-time and temporary employees.
Once the acquisition is finalized, it will be Nucor’s second joint venture with JFE. Since 2020, the two companies have operated an automotive steel joint venture in Mexico. Installation in Mexico has the capacity to produce 400,000 tons of galvanized steel for the automotive industry per year.
Nucor and its subsidiaries are manufacturers of steel and steel products, with operating facilities in United States, Canada and Mexico. Products manufactured include: carbon and alloy steel – in bars, beams, plates and sheets; tubes of hollow structural section; Electrical conduit; steel shelving; steel piles; steel beams and beams; steel platform; fabricated reinforcing steel; cold finished steel; precision castings; steel fasteners; metal building systems; insulated metal panels; steel grating; and wire and wire mesh. Nucor, through David J. Joseph Company, also brokers in ferrous and non-ferrous metals, pig iron and hot iron brickwork direct reduced iron / iron; Provisions ferroalloys; and processes ferrous and non-ferrous waste. Nucor is North America the biggest recycler.
Certain statements contained in this press release are “forward-looking statements” that involve risks and uncertainties. The words “anticipate”, “believe”, “expect”, “intend”, “project”, “could”, “will”, “should”, “could” and similar expressions are intended to identify these forward-looking statements. These forward-looking statements reflect the best judgment of the Company based on current information and, although we base these statements on circumstances that we believe are reasonable when made, there can be no assurance that future events will not affect the Company. accuracy of these forward-looking statements. information search. As such, forward-looking statements are not guarantees of future performance, and actual results may differ materially from the projected results and expectations discussed in this press release. Factors that could cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including pressure from imports and substitute materials; (2) US and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing market steel prices and to changes in the supply and cost of raw materials, including pig iron, iron ore and scrap; (4) the availability and cost of electricity and natural gas, which could negatively impact our steel production costs or cause the delay or cancellation of existing or future drilling under our programs natural gas drilling; (5) critical equipment failures and business interruptions; (6) Market demand for steel products, which in the case of many of our products is driven by the level of non-residential construction activity in United States; (7) impairment of the recorded value of inventories, participations, fixed assets, goodwill or other long-lived assets; (8) uncertainties surrounding the global economy, including excess global steel production capacity; (9) fluctuations in currency conversion rates; (10) material changes in laws or government regulations affecting environmental compliance, including laws and regulations that result in stricter regulation of greenhouse gas emissions that could increase our energy costs, capital expenditures and our operating costs or result in the revocation of one or more of our permits or make it more difficult to obtain permit modifications; (11) the cyclical nature of the steel industry; (12) capital investments and their impact on our performance; (13) our safety performance; and (14) the impact of the COVID-19 pandemic and any variant of the virus. These and other factors are discussed in Nucor’s regulatory documents with the Securities and Exchange Commission, including those in Section 1A. Risk Factors from Nucor’s Annual Report on Form 10-K for the Year Ended. December 31, 2020. The forward-looking statements contained in this press release speak only as of that date and Nucor assumes no obligation to update them, except as required by applicable law.
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SOURCE Nucor Corporation