SDI to Buy CSN's Indiana Steel Operations for $400 Million

Steel Dynamics has entered into an agreement to purchase Companhia Siderurgica Nacional (CSN) wholly owned Indiana-based subsidiary for $400 million in cash, inclusive of $60 million of normalized working capital, according to the company late Monday.<br />CSN's Heartland's operation in Terre Haute, Indiana, is focused on value-added flat-rolled...

Steel Dynamics has entered into an agreement to purchase Companhia Siderurgica Nacional (CSN) wholly owned Indiana-based subsidiary for $400 million in cash, inclusive of $60 million of normalized working capital, according to the company late Monday.

CSN's Heartland's operation in Terre Haute, Indiana, is focused on value-added flat-rolled sheet products with an annual capacity of 1 million st of cold-rolled coil steel and 360,000 st of galvanizing capacity. The assets include a continuous pickle line, a cold mill and a galvanizing line.

The acquisition expands SDI's flat-rolled steel shipping capacity to 8.4 million st/year and will increase its exposure to lighter-gauge and greater width flat-rolled steel offerings.

SDI plans on increasing the utilization rate of the mill across its three main product offerings.

"Historically, Heartland has been operated at low utilization, primarily focusing on galvanized products. Future plans are to utilize the full capacity of the facility, providing high quality cold roll, pickle and oil, and galvanized products," the steelmaker said.

"The geographic proximity to Steel Dynamics' other flat roll operations and certain fabrication locations provides opportunities related to logistics and production efficiencies throughout the supply chain and customer network," added SDI, which is based in Fort Wayne, Indiana.

Brazil-headquartered CSN said the sale is part of its divestiture and deleverage plan and it will maintain its commercial import and distribution activities in North America through another subsidiary to be set up for this purpose.

The transaction has received all required corporate approvals from respective parties and is only subject to customary conditions and receipt of regulatory approvals. SDI expects the transaction to be completed the transaction before the end of the third quarter.
 

Source: www.platts.com