Nucor Corporation announced today that it has reached agreements to acquire a majority ownership position in California Steel Industries, Inc. (CSI) by purchasing a 50 percent equity interest from a subsidiary of Vale S.A. (Vale) and a 1 percent equity ownership stake from JFE Steel Corporation (JFE). The company will be a joint venture between Nucor and JFE, pending regulatory approvals. Nucor will pay a cash purchase price to Vale of $400 million for the 50 percent enterprise value, adjusted for net debt and working capital at closing.
"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," said Leon Topalian, President & Chief Executive Officer of Nucor Corporation. "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. We look forward to continuing to grow with our partners at JFE."
CSI is a flat-rolled steel converter with the capability to produce more than two million tons of finished steel and steel products annually. The company has five product lines, including hot rolled, pickled and oiled, cold rolled, galvanized and ERW pipe. Key end-use segments served by CSI include customers in the construction, service center and energy industries. CSI employs more than 800 full-time and temporary employees.
When the acquisition is completed, it will be Nucor's second joint venture with JFE. Since 2020, the two companies have been operating an automotive steel joint venture in Mexico. The facility in Mexico has the capacity to produce 400,000 tons of galvanized steel for the automotive industry per year.