Vale Canada, a subsidiary of Brazilian major Vale, has entered into an agreement to sell its 50% ownership in California Steel Industries to US steel group Nucor for $400-million.
Vale, which became a shareholder in CSI in 1984, said on Monday that the disposal was in line with its focus on core businesses and a commitment to a leaner portfolio.
Besides the 50% interest from Vale, Nucor also announced that it would buy a 1% equity ownership stake from JFE to gain a majority 51% holding in CSI. CSI would be a joint venture (JV) between Nucor and JFE, pending regulatory approvals.
“Acquiring a majority ownership stake in California Steel Industries expands our geographic reach in sheet steel and gives us a strong presence on the West Coast,” Nucor president and CEO Leon Topalian in a statement.
“This acquisition will grow our portfolio of value-added sheet products, provide opportunities for increased internal shipments and enable us to provide our downstream businesses in the region such as Verco and Hannibal Industries with sheet steel products. We look forward to continuing to grow with our partners at JFE.”
CSI is a flat-rolled steel converter with the capability to produce more than two-million tons a year of finished steel and steel products.
When the acquisition is completed, it would be Nucor’s second JV with JFE. Since 2020, the two companies have been operating an automotive steel JV in Mexico. The facility in Mexico has the capacity to produce 400 000 t/y of galvanised steel for the automotive industry.