Nucor to pay Vale $400 million in cash for 50% stake in California Steel

US diversified steel and steel products company Nucor is to pay a Vale subsidiary $400 million in cash for a 50% stake in California Steel Industries and a 1% equity ownership stake from JFE Steel Corp., the company said Dec. 13.

CSI will be a joint venture between Nucor and JFE, pending regulatory approvals, Nucor said.

The company said CSI is a flat-rolled steel converter with the capability to produce more than 2 million mt of finished steel and steel products annually, and it has five product lines, including hot rolled, pickled and oiled, cold rolled, galvanized and ERW pipe.

Nucor said key end-use segments served by CSI include customers in the construction, service center and energy industries.

"Acquiring a majority ownership stake in California Steel Industries expands our geographic reach in sheet steel and gives us a strong presence on the West Coast," Nucor CEO Leon Topalian said in a statement.

"This acquisition will grow our portfolio of value-added sheet products, provide opportunities for increased internal shipments and enable us to provide our downstream businesses in the region such as Verco and Hannibal Industries with sheet steel products," Topalian said.

Should the acquisition be completed, this will be Nucor's second JV with JFE. Since 2020, the two companies have been operating an automotive steel JV in Mexico, Nucor said.

The facility in Mexico has the capacity to produce 400,000 mt/year of galvanized steel for the automotive industry, the company said.