Steel Mills

ArcelorMittal to Close on TK in Q1

February 9, 2014

The acquisition of the ThyssenKrupp Calvert, Alabama mill by joint partners ArcelorMittal and NSSMC is expected to close during the first quarter of 2014. The company has received Department of Justice anti-trust approval and is waiting for other regulatory approvals to clear. ArcelorMittal is prohibited from looking at the customer mix and order book until they take control of the facilities. Mill production is currently at around 3 million tonnes with improvement in operating rates over the past few quarters. ArcelorMittal expects to ramp up production when they take over.

“Clearly, it’s a facility that’s capable of producing and serving very high-end markets. For those that have visited, you recognize that the principal target markets there are automotive and energy, said Lou Schorsch, CEO ArcelorMittal Americas, in a conference call on Feb. 7. “We are obviously big players in those markets already but, certainly, I think that allows us to optimize in terms of the shipment.”

ArcelorMittal expects synergies of $60 million from the Calvert operation and positive EBITDA in the first year of operation.

The facility is a very good one. I think that the people are good, et cetera, so we’re very pleased about it and confident that we can make it work,” said Schorsch.

Part of the deal for the TK facility was an arrangement to purchase slabs from CSA in Brazil. Schorsch said that “we would plan to be able to then round that out in large part with our own slabs either from excess that we have in the US or potentially from our slab-making operations in Mexico and Brazil.