Steel Mills
Algoma IPO Nears with Legato Deal Expected to Close This Week
Written by Michael Cowden
October 19, 2021
Algoma Steel’s initial public offering (IPO) is around the corner following shareholder approval of a deal between the Canadian steelmaker and Legato Merger Corp., a special purpose acquisition company (SPAC)
The merger between the New York-based SPAC and privately held Sault Ste. Marie, Ontario-based Algoma is expected to close this week, an Algoma spokeswoman said.
Legato shareholders approved the merger last week. The transaction will see Algoma acquired by the SPAC, which was created to take the private steelmaker public.
Once the deal closes, Algoma will go public and its shares will trade on the Nasdaq Stock Market and the Toronto Stock Exchange under the ticker ASTL, according to a press release.
The deal, announced in May, has been valued at $1.7 billion. Proceeds from the IPO are expected to help fund Algoma’s transition to electric arc furnace (EAF) steelmaking.
Algoma makes hot-rolled coil, cold-rolled coil and plate for a range of end markets including automotive, construction, energy and defense, according to the company’s website.
The company has two blast furnaces: The No. 7 has daily capacity of 8,400 tons of iron. The No. 6 has capacity of 3,000 tons of iron per day but is idle, according to SMU’s blast furnace status table.
Algoma is the latest in a host of steelmakers around the world to announce plans to switch to EAF steelmaking.
In North America, U.S. Steel has already replaced the blast furnace at its Fairfield Works in Alabama with an EAF. And the Pittsburgh-based steelmaker last month also announced plans to build a $3 billion EAF sheet mill with capacity of three million tons per year.
And U.S. Steel’s mill in Košice, Slovakia, is said to be considering an EAF as Europe looks to decarbonize. Other integrated steelmakers in Europe – Swedish steelmaker SSAB, for example – already have plans to replace their blast furnaces with EAFs.
The backdrop for such decisions: The steel industry accounts for 8% of total global CO2 emissions. And most developed countries have announced or begun implementing plans to significantly reduce those emissions.
Decarbonization is also expected to be a hot topic at the next Conference of the Parties meeting. Also known as COP26, the event will be held in November in Glasgow, Scotland.
The Conference of the Parties is the main decision-making body of the United Nations’ Framework Convention on Climate Change (UNFCCC).
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
Read more from Michael CowdenLatest in Steel Mills
Algoma to shut down line in Ontario ahead of EAF start
The 106” Mill was part of Algoma's plate and strip combination facility.
Nippon trial vs. US government to begin early next month: Report
Nippon Steel’s litigation against the US government is set to begin in early February, according to a report by Japan’s Kyodo News Agency. Nippon will file its opening brief on Feb. 3. And both parties will conclude their claims by March 17 in the US Court of Appeals for the District of Columbia Circuit, Kyodo […]
Nucor carbon targets certified by GSCC
Nucor’s “ambitious” carbon targets by the end of the decade and beyond have been certified by the Global Steel Climate Council (GSCC). The Charlotte, N.C.-based steelmaker used a base year of 2023 for its science-based emissions targets (SBET). It set an SBET of 0.975 metric tons (mt) of CO2 emissions per mt of hot-rolled steel […]
SSAB halts talks with Feds on Miss. green steel plant
The Department of Energy's Industrial Demonstrations Program page states that it is no longer moving forward with SSAB.
Cleveland-Cliffs CEO seeks ‘American solution’ for U.S. Steel
He said a new entity would operate under the U.S. Steel name and would retain its Pittsburgh headquarters.