Nucor Moves Forward on Italian Beams Venture with Duferco
05/14/2008 - Nucor enters agreement to acquire 50% of its Duferdofin-Nucor Srl beam production and distribution joint venture with Duferco, for euro 423.5 million.
Nucor Corp. has entered into an agreement to acquire 50% of joint venture Duferdofin-Nucor Srl, for euro 423.5 million (approximately $658 million).
The joint venture, which is being formed by Nucor and Duferco SA, Switzerland, will produce beams and other long products in Italy and distribute them in Europe and North Africa. As announced in January, the joint venture will build upon Duferco's Italian long product production assets in San Zeno, Pallanzeno, and Giamorro, Italy, which produced in excess of 900,000 tonnes of beams and other long products in 2007.
In addition to Duferco’s existing production facilities, a new merchant bar mill is under construction in Giamorro. The companies said that the new mill is expected to be operational in late 2008, and that additional investments in the Italian operations are also under review.
"Since our earliest contacts with Nucor, we have experienced a complete agreement on business vision, which is a fundamental basis for the success of any venture,” said Duferco Chairman, Bruno Bolfo.
Nucor—the largest producer of beams in North America and a recognized leader in the efficient combination of technology and people—brings to the venture its considerable technical and commercial expertise. “Nucor's recognized operating skills will greatly assist in further improving the industrial performance of the joint venture and also assist in the future industrial design of the plants,” said Bolfo. “We are very excited by the prospects of this joint venture and look forward to close cooperation with Nucor.”
Dan DiMicco, Nucor's CEO and Chairman, noted, "Our teams have worked together smoothly from the development of the memorandum of understanding through execution of the definitive agreements. Both companies have a similar focus on both customer service and working together as a team. We look forward to working even more intensively together through the closing of this deal and into the exciting times ahead.
“We are convinced that, working together, Nucor and Duferco will reach new heights of achievement in customer service for the full range of beam and structural products,” concluded DiMicco.
Formation of Duferdofin-Nucor and finalization of Nucor’s acquisition of the 50% stake in it will occur after satisfactory resolution of any regulatory approvals, transfer of appropriate permits and other contracts, and other closing conditions. The transaction is expected to close during the third quarter of 2008. The investment by Nucor values the new venture at around 6.3 times adjusted EBITDA.
Nucor and affiliates manufacture steel products, with operating facilities primarily in the U.S. and Canada. Products produced include carbon and alloy steel bars, beams, sheet and plate; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Co., also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and non ferrous scrap. Nucor is North America's largest recycler.
