Steel Mills

Nippon agrees to sell Calvert stake, if USS deal closes

October 11, 2024

ArcelorMittal is set to take full ownership of AM/NS Calvert if Nippon Steel finalizes its pending acquisition of U.S. Steel.

ArcelorMittal and Nippon announced on Friday that they’ve entered into a definitive equity purchase agreement. In it, Nippon has agreed to transfer its 50% stake in the AM/NS Calvert joint venture to ArcelorMittal upon the consummation of its $14.9-billion purchase of USS.

ArcelorMittal had previously said that this could happen.

The agreement states that Luxembourg-based ArcelorMittal will pay Nippon $1 for the transaction. Additionally, Nippon “will inject cash and forgive partner loans in an amount estimated to be approximately $0.9 billion,” ArcelorMittal said in a separate s t atement.

However, if the Nippon/USS deal does not go through, the Calvert operation will remain a joint venture of the two steelmaking conglomerates.

Tokyo-based Nippon said in a statement on Friday that divesting its stake in the Alabama steel mill proactively addresses any antitrust concerns and “is the most assured path to receiving timely regulatory approval for the acquisition.”

Nippon/USS merger

Nippon’s purchase of USS still faces regulatory hurdles in the US. This includes a national security review by the Committee on Foreign Investment in the US (CFIUS). That decision has been delayed until after the US elections on Nov. 5.

Additionally, the United Steelworkers (USW) union remains opposed to the deal. And that’s despite Nippon pledging to invest “no less than $1 billion” at U.S. Steel’s union-represented Mon Valley Works in Pennsylvania.

The union is still understandably upset with USS after it canceled a previously announced $1.2-billion investment for Mon Valley. It reminded members in a communication on Friday that “capital investment promises mean nothing if they are not included in a labor agreement and unenforceable.”

U.S. Steel and Nippon remain hopeful that the deal will close by the end of 2024.

AM/NS Calvert mill

ThyssenKrupp began building the flat-rolled steel finishing facility in Calvert, Ala., just north of Mobile, in 2007. ThyssenKrupp Steel USA began operating in 2010, relying on external slabs for its rolling operations. The German steelmaker decided to sell the mill and it became a joint venture of ArceloMittal and Nippon in 2014.

The Calvert operations include a hot strip mill, continuous pickling line, pickle line-tandem cold mill, and galvanized and aluminized coating lines. Nippon said the mill produced 4.7 million tons of steel products in 2023.

An electric-arc furnace is currently being constructed at Calvert to give the mill full melting capabilities. Start-up of the 1.65-million-short-ton-per-year EAF is still slated for this year. ArcelorMittal’s facility in Gregory, Texas, will supply hot-briquetted iron (HBI) for the furnace.

Two additional investment projects are under consideration for the Calvert mill: a second EAF and a non-grain oriented electrical steel line.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.