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Steel manufacturing giant ArcelorMittal and Nippon Steel & Sumimoto Metal said in a statement they agreed to buy a US steel plant owned by German firm ThyssenKrupp for $1.55 billion.
The agreement is for a 50-50 joint venture partnership between the Luxembourg-based ArcelorMittal and Japanese titan Nippon Steel, the former company said in a statement.
The ThyssenKrupp plant in question is located in Calvert, in the southern US state of Alabama, and has a total capacity of 5.3 million tonnes of steel destined mainly for auto manufacturing and construction.
The purchase will be financed through a combination of equity and debt at the joint venture level, the statement read.
ArcelorMittal and the Japanese steel giant already jointly produce steel in the state of Indiana.
The deal includes a six-year agreement to buy two million tonnes of slab annually from TK CSA, an integrated steel mill complex located in Rio de Janeiro, Brazil, using a market-based price formula.
The yen's plunge against the dollar since late last year has improved Japanese automakers' income, but Nippon Steel believes they will continue shifting automobile production overseas, the Nikkei Economic Daily reported earlier.
