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Steel Dynamics agrees to acquire CSN's US unit for US$400M

Steel Dynamics Inc. said May 14 that it inked a definitive agreement to acquire Cia. Siderúrgica Nacional's Indiana-based unit for US$400 million.

The purchase price, which is inclusive of US$60 million of normalized working capital, will be funded with available cash.

The transaction will expand Steel Dynamics' annual flat roll steel shipping capacity to 8.4 million tons and total shipping capability to 12.4 million tons, and is expected to be accretive to near-term earnings and per-share cash flow.

The CSN unit produces various types of higher-margin, flat roll steel by further processing hot roll coils into pickle and oil, cold roll, and galvanized products. The operations have the annual capacity to produce 1.0 million tons of cold roll steel, with galvanizing capacity of 360,000 tons.

The acquisition "levers our core strengths, and at the same time fulfills our initiatives to further increase value-added product and market diversification," said Steel Dynamics CEO Mark Millett.

Steel Dynamics expects to secure all necessary regulatory approvals and complete the transaction before the end of the third quarter.

Brazilian daily O Estado de S. Paulo reported in mid-April that CSN was in talks to sell the unit to Steel Dynamics for about US$250 million.

CSN CEO Benjamin Steinbruch recently vowed to proceed with the deleveraging of the company by July. The executive earlier flagged plans to conclude asset sales of 2 billion to 3 billion reais this year to slash its debt.

As of May 14, US$1 was equivalent to 3.62 Brazilian reais.