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Deal Drives U.S. Steel's Auto Goals

Tuesday, June 9, 2015

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PITTSBURGH--Accelerating its presence in the automotive industry, U.S. Steel has bought out the world's largest producer of electro-galvanized steel.

The Pittsburgh steel giant has purchased AK Steel's interest in Double Eagle Steel Coating Company (DESCO) of Dearborn, MI, which the two companies had held jointly.

The move gives U.S. Steel a 700,000-ton electrolytic-galvanizing line (EGL) that will become part of the larger operational footprint of the company's Great Lakes Works in Dearborn, MI.

USSteelTower DESCO
U.S. Steel (left) will purchase all of Double Eagle Steel Coatings (above) to increase its stake in the lightweight automotive industry, the company said. The deal includes a one-time $25.2 million payment.
Derek Jensen / Public Domain (left); DESCO Coatings (right)

That facility will begin providing steel coated products for exposed and unexposed applications, increasing  U.S. Steel announced.

DESCO had been a 50-50 joint venture between U.S. Steel and Severstal North America Inc. until last year, when AK Steel acquired Severstal's stake in purchasing the Dearborn company's North America’s operations.

The new deal includes a one-time $25.2 million payment. DESCO employees will remain at AK Steel for 90 days after the deal closes.

U.S. Steel said the acquisiton was part of its multiyear "Carnegie Way" reorganization activities to improve the company's operating flexibility, cost structure and raw materials position.

U.S. Steel also operates PRO-TEC Coating Company as a joint venture with Kobe Steel Ltd. of Japan. That venture began in 1990.

Pittsburgh-based U.S. Steel is a global integrated steel producer with an annual raw steelmaking capability of 24.4 million net tons.

 

   

Tagged categories: Acquisitions; Automotive coatings; Business matters; Coating Materials; Galvanized steel; North America; U.S. Steel

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