Steel Products

SDI to Acquire CSN's Indiana Steel Mill

May 15, 2018

On Monday, Steel Dynamics announced the acquisition of the CSN Heartland flat rolled steel mill in Terre Haute, Ind. The purchase was reported to be for $400 million in cash. The CSN plant has the ability to roll 1 million net tons of cold rolled and to coat approximately 360,000 net tons of galvanized.

Steel Dynamics, Inc., announced that it has entered into a definitive agreement to acquire Companhia Siderurgica Nacional, LLC (“Heartland”) from CSN Steel, S.L.U., a wholly-owned subsidiary of Companhia Siderurgica Nacional. Heartland produces various types of higher-margin, flat roll steel by further processing hot roll coils into pickle and oil, cold roll and galvanized products. Steel Dynamics believes the $400 million purchase price approximates current replacement value. The acquisition will expand Steel Dynamics’ annual flat roll steel shipping capacity to 8.4 million tons and total shipping capability to 12.4 million tons. The additional exposure to wider, lighter-gauge flat roll steel offerings will broaden SDI’s value-added product portfolio, the company said.

“The acquisition of Heartland represents a step in the continuation of our growth strategy,” said Mark D. Millett, Chief Executive Officer. “It levers our core strengths, and at the same time fulfills our initiatives to further increase value-added product and market diversification. We look forward to welcoming the Heartland employees and customers into the Steel Dynamics family, and working with them to drive future growth and success.

“We have positioned our capital structure and organizational framework for growth,” continued Millett, “and we believe this acquisition will result in numerous future earnings benefits both to Heartland’s current operations and to our Midwest flat roll operations. In combination with our current operations, Heartland brings a tremendous amount of operating flexibility and optionality. As a part of our broader business platform, Heartland is expected to provide numerous synergies with our existing operations, and we look forward to levering these opportunities in the future.”

Heartland has the annual capability to produce 1.0 million tons of cold roll steel, with galvanizing capacity of 360,000 tons. Heartland is comprised of a continuous pickle line, a cold mill and a galvanizing line. The equipment has been upgraded, well-maintained, and is in excellent operating condition. Historically, Heartland has been operated at low utilization, primarily focusing on galvanized products. Future plans are to utilize the full capacity of the facility, providing high-quality cold roll, pickle and oil, and galvanized products. The geographic proximity to Steel Dynamics’ other flat roll operations and certain fabrication locations provides opportunities related to logistics and production efficiencies throughout the supply chain and customer network, SDI said.

Steel Dynamics expects to obtain all necessary regulatory approvals and complete the cash transaction before the end of third-quarter 2018.