Big River Steel of Osceola, Arkansas, USA, has announced that it has entered into an agreement with United States Steel Corporation (US Steel) in which Big River will receive $700 million in cash in return for a minority ownership interest in its scrap recycling and steel production company.

Under the terms of the transaction, which assumes a $2.325 billion enterprise value, the companies will form a joint venture under which US Steel will hold a 49.9% ownership interest. As part of its investment, US Steel will hold an option to acquire the remaining 50.1%. Big River Steel’s original owners will also hold certain options related to the future ownership make up of Big River Steel should US Steel choose not to exercise its option.

Big River’s Osceola, Arkansas Flex Mill™ is the world’s only LEED-certified steel mill and is the newest and most technologically advanced flat-rolled mill in North America. Since production began in early-2017, Big River has already positioned itself as one of the premier steel producers in North America in terms of profitability, product quality, employee productivity and environmental sustainability.

Big River’s early success and entrepreneurial culture has led to the commencement of construction on a project that will double Big River Steel’s production capacity from 1.65Mt/yr to 3.3Mt/yr of flat-rolled steel. This investment will facilitate the company’s ability to produce even higher grades of electrical steel, demand for which is expected to increase with continued focus on energy efficiency and the increase in hybrid and electric vehicle sales.

“Five years ago we started Big River Steel with five employees with big ideas and today we are partnering with a company started by Andrew Carnegie 118 years ago,” said David Stickler, chief executive officer of Big River Steel. “As partners with US Steel, we intend to prove to the world that the best way to make steel is by combining the best of traditional integrated steel making with the best of electric arc furnace mini mill steel making.”