Boston, MA 10/10/2014 (wallstreetpr) – The shares of steel giant, ArcelorMittal SA (ADR)(NYSE:MT) were down on Thursday by nearly 4% to $12.39, following its announcement of closure of sales. The company along with Brazil’s Gerdau SA (ADR) (NYSE:GGB) have reportedly their 50 % stakes in Gallatin Steel Company to Nucor Corporation (NYSE:NUE). The move from the company comes as a part of its quest to divest from non-core assets and focus on its core business.
In Line With Strategy
Gallatin Steel is a joint venture formed by both ArcelorMittal SA (ADR) (NYSE:MT) and Gerdau SA (ADR) (NYSE:GGB). It is a mill that melts scrap, hot briquetted iron and pig iron to manufacture flat steel and is situated in Gallatin County, Kentucky, USA. The sale of the stake fetched $770 million to the two companies. Following the sale, ArcelorMittal SA (ADR) (NYSE:MT)’s CFO, Aditya Mittal said that the sale will boost value for its shareholders’ and goes in line with the company’s strategy to divest from non-core assets.The company has been striving to keep its profitability intact amid the slowing growth in Europe, which contributes half of the revenues of the company. Meanwhile, Gerdau SA (ADR) (NYSE:GGB)’s CEO Andre B Gerdau Johannpeter too confirmed the company’s intention to focus on its North America based assets following the sale.
Nucor Sees Benefits
The stake sale from two companies will help Nucor to increase its capacity of flat rolled iron to 13 million tons on an annual basis, which is currently at 1,8000,000 tons. Nucor finds the acquisition as well-times as it will be able to bank upon the synergies of Gallatin in the current term of season. Also, through this acquisition, Nucor Corporation (NYSE:NUE) is now able to create its footprint in the Midwest market, which is considered as a large market for flat-rolled iron in the U.S. Clearly, through this buy, Nucor’s CEO and President, John Ferriola is looking forward to unlock a series of tremendous opportunities that lay ahead.
