American steelmaker Nucor has acquired Gallatin Steel Company for US$770 million.
The 1.8Mt/yr flat-rolled products mill located in Gallatin County, Kentucky, USA, is owned on a 50:50 basis by ArcelorMittal and Brazilian steelmaker Gerdau and melts scrap, pig iron and hot briquetted iron (HBF) to make a variety of different steels from low to high carbon grades.
Nucor hopes the acquisition will strengthen its position in America's Midwest where it is building a strong customer base in the growing pipe and tube sector of the market.
The Gallatin acquisition is likely to increase Nucor's total flat-rolled production capacity by 16% to 13Mt and should be finalised by the year-end, subject to the usual regulations, including the Hart Scott Rodino Antitrust Improvements Act waiting period.
Where the sellers are concerned, Nucor's acquistion of Gallatin is good news all round. For ArcelorMittal the deal fits in nicely with its strategy to dispose of what it regards as non-core assets. For Gerdau it means that the Brazilian steelmaker can focus on its core North American assets.
Andre B Gerdau Johannpetter, Gerdau's CEO, said: "The decision to sell Gallatin was made in order for Gerdau to focus on its core assets in North America."
ArcelorMittal's CFO, Aditya Mittal, said that the sale of Gallatin 'unlocks substantial value for ArcelorMittal's shareholders' and is consistent with the company's strategy of selective divestment of non-core assets.