ThyssenKrupp Plant in Alabama Sold to ArcelorMittal/Nippon Steel Joint Venture

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Researched by Industrial Info Resources (Sugar Land, Texas)--It's final: ThyssenKrupp Steel Americas LLC has sold its steel complex in Calvert, Alabama, to ArcelorMittal (NYSE:MT) (Luxembourg, Luxembourg) and Nippon Steel & Sumitomo Metal Corporation (NSSMC) (Tokyo, Japan), in what will be a 50:50 joint venture partnership, for $1.55 billion. The complex has a total annual capacity of 5.3 million metric tons per year. It includes hot rolling, cold rolling, coating and finishing lines.

The two buyers reportedly will split the cost evenly. The stainless steel portion of the complex was completed in 2010, and the carbon steel hot strip mill was added in 2011. The melt shop was completed just this February.

ThyssenKrupp has been trying to sell its Steel Americas division, which includes steel mills in Alabama and Brazil, for more than a year. There has been interest among buyers, but no one has yet inked a deal with either of the companies. The mills were built for a combined cost of about $12 billion.

ThyssenKrupp CSA, a subsidiary of ThyssenKrupp AG (Duisburg and Essen, Germany), originally hoped to sell the Calvert complex alongside its integrated steel mill in Rio de Janeiro, Brazil. While that part of the original plan did not come to fruition, the final transaction does include a six-year agreement for ArcelorMittal and NSSMC to jointly purchase 2 million metric tons of slab per year from the Rio de Janeiro plant, which has an annual capacity of 5 million tons. ThyssenKrupp CSA also has retained the option to extend this purchase agreement for an additional three years.

Any remaining slab balances that will be used at the Calvert plant will be secured from ArcelorMittal plants in the U.S., Brazil and Mexico. ArcelorMittal will be in charge of promotion for the final product in the joint venture.

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