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“For months, I’ve said that we can’t get to the future fast enough. Today, I can say the future is now. We are acquiring Big River Steel, the cornerstone of our ‘Best of Both’ strategy,” said David B. Burritt, president and chief executive officer of US Steel. “With Big River Steel, we can offer customers the high performance, innovative steel products they expect from US Steel’s scientists and application engineers made through a state-of-the-art, environmentally sustainable and efficient mini mill process.”
Dave Stickler, CEO of Big River Steel, commented: “I’m extremely proud of what our Big River Steel team has achieved in building the most technologically advanced and only LEED certified steel mill, and I’m equally proud that we are joining a company that not only values our many accomplishments, but shares our vision as well. Being an entrepreneurial disrupter is in our DNA and I’m excited about the possibilities we have already demonstrated by leveraging US Steel’s industry-leading research and development capabilities. I can’t wait to show the world what the ‘Best of Both’ truly means.”
Big River Steel operates a LEED-certified Flex Mill™ in northeast Arkansas that is believed to be the newest and most advanced flat-rolled mill in North America. Big River Steel’s advanced manufacturing technology and skilled operators combined with US Steel’s product development capabilities and intellectual property have allowed Big River Steel to produce 11 advanced US Steel grades, including substrate for its XG3™ grade of Generation 3 advanced high-strength steels (AHSS). Big River Steel offers high-quality products and services to discerning customers in the automotive, energy, construction, and agricultural industries. The company''s Phase II-A expansion doubled the mill’s hot-rolled steel production capacity to 3.3Mt annually, establishing it as one of the largest electric arc furnace-oriented flat-rolled mills in North America. The Phase II-A expansion was completed in November of this year, ahead of schedule and below Big River Steel’s previously disclosed budget.
Burritt continued, “We are acquiring now to expand the benefits of this powerful partnership. This is aligned with the strong strategic execution and meaningful progress we’ve demonstrated in 2020 toward our goal of $1 billion in capital and operational cash improvements. By completing our top strategic priority, Big River Steel, we expect to strengthen our order book, increase our competitiveness and accelerate further product innovation for our customers. Longer term, the lower, variable cost structure will increase our efficiency, profitability and cash flow across the business cycle.”
“We look forward to welcoming the Big River Steel team to the US Steel family. We have already successfully produced 11 of US Steel’s proprietary grades at Big River, including our most innovative Generation 3 grades of advanced high-strength steel. With Big River Steel, we expect to more nimbly respond to improving market conditions in the near-term and disrupt the steel industry to the long-term benefit of our customers.”
Since its 31 October 2019, acquisition of a 49.9% ownership interest in Big River Steel, US Steel claims it has created strategic benefits, validating the strong strategic rationale expected to be realized upon full ownership of Big River Steel. Key accomplishments to date include:
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Big River Steel’s production of substrate for US Steel’s industry-leading XG3™ advanced high-strength steel and other automotive grades that will ultimately increase US Steel’s competitiveness in a broader range of automotive applications to better serve strategic customers. This will increase US Steel’s ability to supply automotive manufacturers with the materials they need to not only meet automobile passenger safety requirements but also significantly reduce weight and emissions to meet future vehicle fuel efficiency (CAFE) standards, all made through an ultra-low-carbon emission production process. These same products are also a “greener” solution for customers who are increasingly focused on sustainability within their supply chains.
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US Steel’s assistance to Big River Steel in developing a wider range of steel grades, including grades predominately made by integrated producers, demonstrating the power of the world competitive ''Best of Both'' integrated and mini mill steelmaking technology strategy.
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Validating the future role of Big River Steel’s proven sustainable steelmaking technology will play in meeting US Steel’s commitment to reduce greenhouse gas emissions intensity across its global footprint by 20%, as measured by the rate of carbon dioxide equivalents emitted per ton of raw steel produced, by 2030 based on 2018 baseline levels. Big River Steel will also increase the steel recycling intensity within US Steel’s footprint.
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Sharing best practices during completion of US Steel’s previously announced strategic investment in electric arc furnace steel production to accelerate operational readiness in Alabama.
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Meaningful progress on the target of achieving as much as $1 billion in capital and operational cash improvements by rescoping asset revitalization investments, reducing fixed costs and extracting incremental value from excess iron ore.
Closing of the transaction is anticipated in the first quarter of 2021, subject to satisfaction of customary closing conditions, including antitrust approval.
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