Steel Mills

BlueScope Steel to Take 100% Ownership of North Star BlueScope

October 27, 2015

Australian steel producer, BlueScope Steel has agreed to acquire Cargill Incorporated’s 50 percent share of North Star BlueScope for $720 million and $40 million in assumed debt, making BlueScope sole owner of the profitable Delta, Ohio mini-mill.

BlueScope exercised its right of last refusal after Cargill was offered a bid for the North Star.

BlueScope Managing Director and CEO Paul O’Malley commented, ““This transaction will give us 100 per cent ownership of an asset that is highly regarded within the U.S. steel sector; full ownership enhances BlueScope’s portfolio value and optionality and improves business flexibility. The North Star business delivers on our strategy of being cost competitive in steelmaking and is best in class.”

“Since FY2005 inclusive, the Company’s 50 per cent ownership interest in North Star has returned over A$1.1 billion of cash dividends,” he added. “This transaction offers a unique opportunity to acquire full ownership of this highly cash generative business,” said

North Star BlueScope, with 380 employees, produces about 2 million tons of hot rolled coil annually and consistently operates at full capacity. BlueScope Steel hopes to further boost North Star’s output by 90,000 tons annually, over the next two years, by increasing casting width and speed.

Sale of North Star BlueScope divests Cargill of its last remaining steel production facility. The company will continue to focus on global trading, distribution and processing of steel mill consumables and products, including iron ore, hot rolled steel coils, steel billets and reinforcing bar (rebar) steel.

Peter Hawthorne, Cargill vice president of Strategy and Business Development and chair of the joint venture’s board of directors, said: “Cargill has been pleased with the performance of the NSBS team in Delta and the financial results of the joint venture. We have chosen to sell our interest in the joint venture to redeploy this capital elsewhere in Cargill’s portfolio and are confident in the team’s continued success under new ownership.”