United States Steel Corp. has agreed to acquire the remaining 50.1% stake in Big River Steel LLC for $774 million, giving the steelmaker ownership of one of the newest, most advanced steel mills in the country.
Ownership of Big River’s Osceola, Ark., mill will give U.S. Steel access to the same production process used by competitors Nucor Corp. and Steel Dynamics Inc., two of the most profitable companies in the domestic steel industry. The company has said the acquisition is the centerpiece of its drive to raise profit by investing in electric furnaces that melt scrap, which are known in the steel industry as minimills.
U.S. Steel bought a 49.9% stake in Big River in October 2019 for $700 million with an option to acquire the rest of the company within four years. Higher steel prices in recent months have helped U.S. Steel raise enough cash to complete the purchase sooner than expected, a person familiar with the matter said.
The spot-market price for coiled sheet steel in the U.S. has rallied to $856 a ton on Monday from below $500 a ton this summer, as a rebounding manufacturing sector ramps up orders. “The timing is just right for us,” U.S. Steel Chief Executive David Burritt said during a conference call Tuesday.
Shares were up 4.1% at $17.90 in premarket trading.