Jones Day represented United States Steel Corporation, an integrated steel producer with major production operations in the United States and Central Europe, in connection with the execution of an Option Agreement for a potential joint venture with Stelco Inc., a vertically integrated Canadian steelmaker. BMO Capital Markets acted as exclusive financial advisor to Stelco and delivered a fairness opinion to Stelco’s Board of Directors. McCarthy Tétrault LLP and Stinson LLP acted as legal counsel to Stelco.
Under the Option Agreement, U. S. Steel granted Stelco the option to acquire an undivided 25% interest in a to-be-formed entity that will own U. S. Steel’s current iron ore mine located in Mt. Iron, Minnesota. As consideration for the option, Stelco will pay U. S. Steel $100 million in five $20 million installments. Additionally, upon exercise of the option, Stelco will contribute $500 million to the joint venture. The option establishes an implied valuation marker for the mine of $2.4 billion.
United States Steel Corporation, headquartered in Pittsburgh, Pa., is a leading integrated steel producer and Fortune 250 company with major production operations in the United States and Central Europe. The company manufactures a wide range of value-added steel sheet and tubular products.
Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products. With first-rate gauge, crown, and shape control, as well as reliable uniformity of mechanical properties, our steel products are supplied to customers in the construction, automotive and energy industries across Canada and the United States as well as to a variety of steel services centres, which are regional distributers of steel products.
Jones Day advised U.S. Steel with David Grubman (Picture) and Zach Brecheisen, Adam Cromie, Brian Trudgen, Patrick O’Brien and Elizabeth Conway.