UPDATE:ArcelorMittal Sells Skyline Steel, Astralloy To Nucor For $605 Million
18 Maggio 2012 - 10:30AM
Dow Jones News
Steel giant ArcelorMittal (MT) announced Friday the sale of
Skyline Steel and Astralloy business in the North American Free
Trade Agreement region to Nucor Corp. (NUE) for around $605
million, on a debt free and cash free basis.
The deal is in keeping with ArcelorMittal's plan to sell
non-core assets to pay down debt and brings the total number of
announced non-core asset sales to about $2.2 billion since
September 2011, according to Dow Jones Newswires calculations.
"Skyline Steel and Astralloy are strong specialist businesses
with excellent prospects in their markets. However, this decision
is very much in line with our strategy of focusing on core assets
and reducing net debt," said Aditya Mittal, ArcelorMittal's chief
financial officer in a statement. "As the largest supplier to
Skyline Steel, Nucor was a natural buyer for this subsidiary
business," he added.
ArcelorMittal, the world's largest steelmaker accounting for
some 6% of the world's production, said that the transaction
includes all of ArcelorMittal's stake in Skyline Steel's operations
in the U.S., Canada, Mexico and the Caribbean. The sale doesn't
include Skyline Steel's operations in the rest of the world, which
will continue to be owned and operated by ArcelorMittal.
The deal is subject to regulatory clearance and is expected to
close by the end of the second quarter.
Skyline Steel is a wholly-owned subsidiary of ArcelorMittal that
distributes high quality and specialty steel products to the
construction and infrastructure industries, including marine
construction and bridge and highway construction.
Skyline Steel sources its products from a range suppliers
including Nucor, its largest supplier, and generated revenues of
$873 million in 2011.
As part of the transaction ArcelorMittal and Nucor will enter
into certain long-term commercial agreements whereby ArcelorMittal
will continue to provide Skyline Steel with a full range of sheet
piling and wear resistant products.
Separately, ArcelorMittal confirmed that it's restarting steel
production at its Sestao steel plant in June in the Basque country
of Spain. The plant had been shut since November 2011 due to weak
demand but "there has recently been a low level recovery in demand
for certain niche products" which has prompted the company to run
one of the electrical furnaces, a continuous caster, and a pickling
line in order to produce 0.8 million tons of steel a year.
At the same time, the company is shutting down its 2.2
million-ton-a-year steel blast furnace B at its Gijon plant in
Asturias, Spain for planned relining in July.
The result of these two measures means that production capacity
will remain static, in line with prevailing low levels of general
demand for steel in the region, the company said.
Currently seven out of ArcelorMittal's 25 European furnaces are
idled. Worldwide, ArcelorMittal has idled 17 out of 63 blast
furnaces.
AcelorMittal also said it plans to start blast furnace 2 at its
Temirtau plant in Kazakhstan in the second quarter.
-By Alex MacDonald and Nadya Masidlover, Dow Jones Newswires;
+33 1 4017 1740; nadya.masidlover@dowjones.com
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