Industry snapshot: After a successful 2018, companies in the steel industry are looking to expand their reach through mergers and acquisitions.
As businesses adjust to market conditions and restart business after the holidays, some key players in the industry have used the current economic conditions to expand and enhance their market share. Here are six companies whose mergers and acquisitions are worth keeping an eye on in 2019:
- Commercial Metals Co.
Commercial Metals Co. (CMC) has acquired 4 US rebar mills and more than 30 rebar fabrication facilities from Gerdau for $600 million in November. This deal has added approximately 2.5 million tons to CMC’s capacity. In addition, CMC recorded a net income of $19.7 million for the fiscal first-quarter of 2019, which is down 46.4% from the same period last year. During the same period, CMC’s net sales were recorded at $1.28 billion; an increase of 18.7% from $1.08 billion last year.
- Steel Dynamics Inc.
Steel Dynamics Inc. (SDI) has made two major acquisition in the last year. First, the company had completed the acquisition of the idled Kentucky Electric Steel, which added flat product and specialty alloy bar to the product line at the company’s subsidiaries. Second, SDI has agreed on a $400 million purchase of Heartland Steel Processing LLC, the former US facility for Brazilian steel producers Cia Siderurgica Nacional.
ArcelorMittal USA recently took over the management of iron ore operations at Hibbing Taconite. In addition, the company completed its acquisition of Ilva. This allows ArcelorMittal to include the Italian steelmaker in its new business cluster within the ArcelorMittal Europe – Flat Products group, called ArcelorMittal Italia.
- Liberty House Group
While ArcelorMittal is expanding its operations in Italy, Liberty House (a subsidiary of GFG Alliance) plans to purchase seven European mills from the company. In October, Liberty House sent an offer to ArecelorMittal regarding its facilities in the Czech Republic, Romania, Macedonia, and Italy. In November, Liberty House said it looks to purchase two mills in Belgium and one in Luxembourg from ArcelorMittal.
In the US, Liberty House has expanded its national reach thanks to a $320 million purchase of Keystone Consolidated Industries Inc’s assets. This purchase could give Liberty House an annual US EAF-based melting capacity of 1.8 million tons, according to GFG Alliance. These acquisitions support claims pertaining to Liberty’s plan to launch an initial public offering sometime during 2019. However, there are no further details at this time, according to an AMM report.
- Olympic Steel Inc.
During the third quarter of fiscal 2018, Olympic Steel saw its net-income surge from $2.3 million in 2017 to over $11 million in 2018. Similarly, its net sales had increased by 37.9% to $457 million from $331.4 million.
Olympic Steel’s acquisitions include an all-cash deal to purchase specialty steel processor Berlin Metals during last year, as well as the purchase of McCullough Industries earlier this month. In doing so, Olympic Steel has established its interest in niche acquisitions across its main segments, which include carbon flat steel, specialty flat steel, and pipe and tube.
- Norfolk Iron & Metal
Norfolk Iron & Metals started 2019 off by buying O’Neal Flat Rolled Metals, which added eight locations to the Nebraska-based company. This acquisition enhanced the company’s product lines and capabilities for a variety of flat-rolled carbon, stainless, and aluminum products. Under the new management, O’Neal Flat Rolled Metals has returned to its former name of Metalwest.← Back To News