US Steel to acquire remaining stake in Big River Steel

Pittsburgh — US Steel has exercised its call option to acquire the remaining equity of Big River Steel for approximately $774 million, the company said Dec. 8.

The transaction will be paid for with cash on hand. The company ended November with about $2.9 billion of liquidity, including more than $1.7 billion of cash, US Steel said.

The transaction is subject to customary closing conditions, including antitrust approval, and is expected to close in the first quarter of 2021, the company said.

US Steel first entered a partnership with Big River in October 2019 when it purchased a 49.9% stake of the Arkansas-based mini-mill sheet steel producer for about $700 million in cash, with a four-year option to acquire the remaining 50.1%.

"By completing our top strategic priority, Big River Steel, we expect to strengthen our order book, increase our competitiveness and accelerate further product innovation for our customers," US Steel CEO David Burritt said in a statement. "Longer term, the lower, variable cost structure will increase our efficiency, profitability and cash flow across the business cycle."

US Steel has already successfully produced 11 of its proprietary grades at Big River, including Generation 3 grades of advanced high-strength steel, according to the company.

In order to preserve certain tax benefits related to Big River Steel's Phase II-A expansion, US Steel will defer the closing of the purchase of a negligible percentage of the equity in Big River Steel for a limited period, US Steel said.

Big River started production at its second electric arc furnace as part of its Phase II expansion in November, doubling the company's annual production capacity to 3.3. million st.