AK Steel closes $700M deal on Michigan steel plant


OTHER AK STEEL UPDATES

Middletown research center develops new product

West Chester Twp.-based AK Steel Holding Corp. on Wednesday said the steelmaker has introduced a new nickel-free stainless steel product known as CHROMESHIELD 22, which will hold down prices for manufacturers of appliance and food service equipment, tubing, cookware, automotive exhaust components and heat exchangers.

The lower-cost material, which was developed and tested at AK Steel’s research center in Middletown, is rust and stain resistant and will meet or exceed the performance of conventional nickel-bearing stainless steels, the company stated.

The material will also better maintain the integrity and appearance of the product compared to many higher-priced stainless steels.

AK Steel now operates eight steel plants after closing a $700 million deal to buy Severstal North America’s Dearborn, Mich., steel plant, the Butler County steelmaker announced Tuesday.

Plans to acquire the plant and expand to Michigan were initially announced in July. Since then, West Chester Twp.-based AK Steel Holding Corp. raised the funds for the purchase by borrowing money and issuing common stock.

The transaction also includes a cokemaking facility and interests in three joint ventures that process flat-rolled steel products.

Dearborn Works, as the plant will now be called, produces carbon flat-rolled steel using a blast furnace. The new operations are expected to boost AK Steel’s future earnings results. In fact, on Sept. 3, AK Steel said it expects to record a profit for the July through September quarter.

Meanwhile, AK Steel also expects to spend $17 million before the end of the year on repairs to its Ashland Works steel plant in Kentucky. Closing the deal on Dearborn Works could help offset those costs, as the company previously said that it could rely on its new Michigan operations while the Kentucky plant is shut down in October.

“At AK Steel, the future is now, and the future is bright, as our acquisition of Dearborn Works makes us a larger, stronger and more flexible company,” said James Wainscott, chairman, president and chief executive officer of AK Steel, in a statement provided.

Dearborn Works is one of several acquisitions since AK Steel became a company in 1994. Actually, the first acquisition was in 1999, when AK Steel acquired the assets of its former parent company Armco Inc., according to historical information provided by company spokesman Mike Wallner. In 2011, AK Steel acquired Alpha Tube and formed the subsidiary AK Tube LLC.

Additionally, in 2011, AK Steel acquired interests in iron ore and metallurgical coal and formed Magnetation LLC, a joint venture with Magnetation Inc.; and AK Coal Resources, a wholly-owned subsidiary.

While AK Steel is a 20-year old company, it’s heritage dates back to the founding of American Rolling Mill Co. in Middletown in 1899.

One of the Cincinnati-Dayton region’s largest publicly-held companies, AK Steel employs approximately 2,400 full-time workers in Butler County between headquarter operations and the Middletown Works steel plant, the company’s largest steel plant.

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