North America's largest steel producer, Nucor Corporation, announced Friday that it has signed a purchase agreement to acquire SHV North America Corporation, owner of scrap broker David J. Joseph Company.
SHV owns 100 percent of The David J. Joseph Company (DJJ), its related affiliates and real estate. After the $1.44 billion acquisition is complete, DJJ will be a wholly owned subsidiary of Nucor Corporation.
Nucor has worked with DJJ since 1969 for its scrap needs. Daniel R. DiMicco, chairman, CEO and president of Nucor Corporation commented, "We are extremely excited to announce the acquisition of a company that has been our partner in growth for the last 38 years. With its considerable scale and excellent management team, DJJ offers Nucor a large platform for continued growth in this segment of the industry."
The following was cited in a news release by Nucor: In addition to DJJ's scrap processing operations and expertise, its extensive brokerage operations provide Nucor with global sourcing of many key steelmaking raw materials. DJJ's rail services and logistics capabilities will allow Nucor to leverage the largest private railcar fleet in North America dedicated to scrap transportation. The industrial scrap programs of DJJ will also provide improved channels of raw materials to Nucor. This acquisition broadens Nucor's raw materials strategy further into the scrap sector. The addition of DJJ to Nucor's current scrap processing capabilities will allow the company to process approximately four million tons of ferrous scrap annually.
The US steel market is beginning to see a trend of vertically integrated sourcing. In late 2007, Steel Dynamics Inc. (SDI) purchased scrap processing company, OmniSource Corp. In addition, CMC owns US scrap processors, and operates as another company which is vertically integrated, owning scrap yards, producing steel at its mills, and running fabrication shops.