ThyssenKrupp AG, Germany, reports that it will sell its ThyssenKrupp Steel USA rolling and coating plant in Calvert, Alabama, to a consortium of ArcelorMittal and Nippon Steel & Sumitomo Metal Corp. A long-term slab supply contract will secure the value of ThyssenKrupp CSA in Brazil. Upon closing, ThyssenKrupp will receive a purchase price of $1.55 billion.
In addition, the consortium will purchase two million tons of slabs per year from ThyssenKrupp CSA up to 2019. The plant in Brazil has an annual production capacity of around five million tons of slabs. The agreement now reached will reliably secure at least 40% capacity utilization of the plant for several years. In addition, stronger penetration of the slab markets in South and North America will further increase the plant’s capacity utilization. The transaction is subject to the approval of regulatory authorities in the USA and a number of other countries.
Dr. Heinrich Hiesinger, Chief Executive of ThyssenKrupp AG, said: “We have found a sustainable solution for Steel Americas. The slab supply contract is a first important step in the decoupling of the two steel plants.” He continued: “The supply contract reduces our risks and creates the conditions to move CSA into profit in the medium term. This is the best available solution for Steel Americas at present. All other options were not financially viable.”
ThyssenKrupp will now concentrate on operating improvements at the Brazilian plant. Over the past fiscal year technical performance has been further optimized and plant efficiency improved. The combination of the sale of ThyssenKrupp Steel USA and the slab supply contract for ThyssenKrupp CSA in Brazil will help ThyssenKrupp improve its cash flow profile and key financials in the future.
