ArcelorMittal gains all Nippon Steel's shares in Alabama JV for $1

ArcelorMittal paid $1 "consideration" for the shares while Nippon Steel expects to record an approximate Yen 230 billion ($1.59 billion) loss in its consolidated financial statements once the share transfer is complete, it said in a statement on Thursday.

But arguably, it's an outcome Nippon Steel happily accepted.

Back in October last year when Nippon Steel was struggling to overcome opposition both from the White House and US lawmakers on Capital Hill to its plans to acquire U.S. Steel, it concluded an Equity Purchase Agreement with ArcelorMittal to transfer all its shares in AM/NS Calvert "immediately", should its plan to buy U.S. Steel succeed, as Mysteel Global reported.

The EPA "aims to proactively address any antitrust concerns that may arise from Nippon Steel's ongoing ownership in Calvert following the acquisition (of US Steel)," it said at the time.

AM/NS Calvert, which was originally acquired by ArcelorMittal and Nippon Steel in 2014 from ThyssenKrupp for $1.55 billion, hosts 5.3 million tonnes/year capacity of hot and cold-rolled coil, hot dipped galvanized sheets and annealed sheets specifically for automotive applications. The company had been owned 50% by ArcelorMittal and 50% by NS Kote, Nippon Steel America Inc's wholly owned subsidiary. The facility is now renamed ArcelorMittal Calvert. 

In a statement issued on June 19, ArcelorMittal noted that since the acquisition of the Calvert facilities in 2014, more than $2 billion in capex investments had been made at the plant, mostly associated with beefing up its surface treated sheet capabilities.

Among the joint projects that from Thursday ArcelorMittal is now pursuing alone is the 1.5 million tonnes/year state-of-art electric arc furnace project that Nippon Steel had joined (with a 50% share) in December 2020 to produce slabs for automotive flat products, as reported. Though construction was delayed, the EAF produced its first batch of molten steel this month, ArcelorMittal also announced on Thursday.

"In addition, a new seven-year domestic slab supply agreement with Nippon Steel has commenced, averaging 750,000 tonnes per year, ensuring a significant portion of the slab requirements are melted and poured in the United States," it said. The slabs will be sourced from US Steel, Japanese sources confirm. A plan for doubling steelmaking capacity at the Calvert plant "is being assessed," ArcelorMittal said.

In its October 11 statement last year regarding the EPA, Nippon Steel had stressed the Calvert equity transfer would not proceed if the U.S. Steel purchase did not go through.

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com