TOKYO (Nikkei) -- Nippon Steel & Sumitomo Metal (5401.TO)
and ArcelorMittal (MT) will jointly acquire an automotive steel
sheet plant in the U.S. from ThyssenKrupp (TKA.XE), more than
doubling the partners' combined production capacity in that
country, the Nikkei reported in its Wednesday morning edition.
The deal is expected to reach Y200 billion ($1.95 billion). For
Nippon Steel, the acquisition would be its largest ever outside
Japan.
The plant, built by ThyssenKrupp for around Y360 billion in the
state of Alabama, launched operations in 2010. Unable to secure
enough customers in the U.S., the German steelmaker had been
looking for a buyer for the unprofitable plant.
Nippon Steel and ArcelorMittal will split the purchase cost
evenly, with specifics to be fleshed out and announced in early
December.
The plant has an output capacity of around 2.2 million tons a
year, supplying automotive and construction steel. The two
companies operate a joint-venture plant in the state of Indiana
that can produce around 2 million tons a year but have faced
looming capacity shortages. By acquiring the state-of-the-art
Alabama facility, at a relatively low price, Nippon Steel and
ArcelorMittal will boost overall U.S. capacity to 4.2 million
tons.
Of this, capacity for highly durable zinc-coated steel sheet
used for auto bodies and other applications will total around 1.5
million tons, or nearly 30% of U.S. demand for such types of
steel.
North American output of passenger vehicles is expected to reach
18.15 million units in 2020, according to U.S. research firm IHS
Global. Increased output of high-end steel sheet by Nippon Steel
and ArcelorMittal will ensure Japanese auto makers a stable supply
as they ramp up vehicle production in the region.
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