NEW YORK — ArcelorMittal SA and Nippon Steel & Sumitomo Metal Corp. have closed their deal for ThyssenKrupp AG’s Calvert, Ala., facility, the companies said Feb. 26.
"The successful completion of this transaction is an important milestone for ArcelorMittal," ArcelorMittal chairman and chief executive officer Lakshmi N. Mittal said in a statement. "Along with (Nippon Steel), we are now the owners of the most modern steel finishing facility in the world, which will allow us to meet rising demand for steel in the automotive, energy and other important Nafta (North American Free Trade Agreement) markets."
A national sales meeting has been slated for the beginning of March to discuss plans after the closing of the deal, two market sources told AMM.
ThyssenKrupp had been selling more competitive lately, one competitor mill source told AMM. "It’s been strange to see and I don’t understand why they’re trying to shed inventory," he said.
The deal could be good news for the industry, coming on the heels of a softening in the steel sheet market plagued by cold weather, short lead times and falling prices.
The move fuels expectations among market players that ArcelorMittal will begin discussing the next steps toward consolidating production. A number of buying sources had told AMM in recent weeks that the purchase of ThyssenKrupp Calvert could be good news if ArcelorMittal makes a widely expected announcement to take capacity offline in the near term, particularly as that move would tighten the sheet market.
But earlier reported plans to run the Calvert facility at full capacity—without a ramp down or consolidation among its facilities—could mean the deal could hurt the steel market due to oversupply, sources said.
Essen, Germany-based ThyssenKrupp announced the sale of its $1.55-billion facility to Luxembourg-based ArcelorMittal and Tokyo-based Nippon Steel in December (amm.com, Dec. 1) and the deal passed U.S. regulatory antitrust approval last month (amm.com, Jan. 30).