LUXEMBOURG—ArcelorMittal has sold its Skyline Steel and Astralloy steel foundation distribution business to Charlotte, N.C.-based steel company Nucor Corp. for about $605 million.
The transaction includes all of ArcelorMittal’s stake in Skyline Steel’s operations in the NAFTA countries and the Caribbean.
ArcelorMittal will continue to own and operate the foundation distribution businesses in the rest of the world.
In 2011, Skyline Steel generated revenues of $873 million.
Skyline Steel, a wholly-owned subsidiary of ArcelorMittal, is a steel foundation distributor serving the construction and infrastructure industries—including marine construction and bridge and highway construction—in the U.S., Canada, Mexico and the Caribbean.
Nucor was Skyline’s largest steel supplier.
As part of the transaction ArcelorMittal and Nucor negotiated long-term commercial agreements for ArcelorMittal to provide Skyline Steel with sheet piling and wear resistant products.
“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, CFO and member of the Group Management Board for ArcelorMittal. “As the largest supplier to Skyline Steel, Nucor was a natural buyer for this subsidiary business.”
The transaction is subject to customary closing conditions, including but not limited to competition clearance, and is expected to be completed by the end of the second quarter of 2012.
“Skyline is a significant consumer of H-piling and hot rolled sheet piling from Nucor-Yamato Steel, and they will become a more valuable downstream consumer of Nucor’s coiled plate and sheet products. Skyline will also develop synergies with our other downstream operations by providing value-added solutions to the construction industry,” said Daniel R. DiMicco, chairman and CEO of Nucor.
ArcelorMittal is the world’s biggest steel and mining company and operates in more than 60 countries, posting 2011 revenues of $94.0 billion and crude steel production of 91.9 million tonnes, representing approximately 6 per cent of world steel output.
Nucor manufactures steel products with facilities in the U.S. and Canada. Nucor is the largest recycler in the U.S.