Steel Dynamics Inc. is significantly expanding its steel production with the $1.625 billion purchase of a Mississippi mini-mill, officials announced Monday.
The Fort Wayne-based steelmaker struck a deal over the weekend to buy Severstal Columbus LLC from OAO Severstal, a Russian company controlled by billionaire Alexey Mordashov, CEO Mark Millett said during a call with analysts.
The acquisition, which will be funded with cash and debt, will expand SDI’s annual steel production capacity by 40 percent to 11 million tons. The deal is expected to close by the end of the year, pending regulatory approval. The Mississippi operation employs 645. Millett described the workers as talented, innovative and safety-oriented who have been rewarded with incentive-driven bonuses. They are, he said, a strong fit for the SDI culture.
Severstal Columbus, one of the newest and most technically advanced mini-mills in North America, will broaden SDI’s product offerings and customer base. The Mississippi mini-mill, which is operating at 85 percent to 90 percent capacity, sells products to the automotive, construction, distributor, and pop and tube markets.
With the purchase, SDI gains a presence in the South, which would make it easier to supply growing manufacturing operations in the South and in Mexico, company officials said. Columbus offers direct rail access to Monterrey, Mexico.
“We’re incredibly excited about this,” Millett said. “The acquisition of Columbus represents a significant step in the continuation of our growth strategy.”
The CEO said he expects Steel Dynamics’ customers, employees and shareholders will benefit from the acquisition.