United States Steel Corporation Completes Strategic Investment in Big River Steel

2 November 2019

United States Steel Corporation today announced that it has completed its acquisition of a 49.9% ownership interest in Big River Steel (“Big River”) for approximately $700 million, which implies an enterprise value of $2.325 billion.

“Today is a true milestone for our 118-year old company,” said David B. Burritt, President and Chief Executive Officer of U. S. Steel. “The closing of our investment in Big River brings us one step closer to creating a differentiated, world-competitive company that can offer our customers, employees and stockholders the ‘best of both’ integrated and mini mill steel making technology. We have done more than make an investment in the newest and most advanced flat-rolled mill in North America … we have invested in the future of U. S. Steel. We are gratified by the positive response we have received from our stakeholders recognizing the strategic rationale of this transaction since we announced it on October 1. We now look forward to executing the next phase of our strategy with our new partners at Big River.”

As announced on October 1, 2019, the transaction includes a call option that gives U. S. Steel the right to acquire the remaining 50.1% of Big River within four years at an agreed-upon price formula. Until that time Big River will operate independently. As previously mentioned, KM BRS, LLC (a subsidiary of Koch Minerals, LLC) and TPG Furnace, L.P. (an affiliate of TPG Growth) remain preferred equity holders of Big River along with the majority common ownership position held by company management and the Arkansas Teachers Retirement System.

U. S. Steel will account for its investment in Big River under the equity method as control and risk of loss are shared among the partnership members. Under the equity method of accounting, U. S. Steel will recognize its share of Big River's after tax net income or loss as well as the amortization of any basis differences due to the step-up to fair value of certain assets and liabilities attributable to Big River. The financial impact of this acquisition will begin to be reflected in U. S. Steel’s fourth quarter 2019 results.

For additional information about U. S. Steel’s investment in Big River Steel, please visit https://ussteel.com/Big-River-investment.

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as, but not limited to, "believes," "expects," "anticipates," "estimates," "intends," "plans," "could," "may," "will," "should," and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this release include, among other things, statements about the potential benefits of the investment and transaction; anticipated cost savings; potential capital and operational cash improvements; U. S. Steel’s plans, objectives, expectations and intentions; the financial condition, results of operations and business of the joint venture; the joint venture’s products and potential; U. S. Steel’s future ability or plans to take ownership of the joint venture as wholly owned subsidiary; U. S. Steel’s ability to obtain financing for the transaction or other strategic projects at anticipated interest rates or at all. Risks and uncertainties include, among other things, risks related to the ability to realize the anticipated benefits of the transaction, including the possibility that the expected benefits and cost savings from the transaction or the capital and operational cash improvements will not be realized or will not be realized within the expected time period; risks related to the satisfaction of the conditions to closing a future call option transaction (including the failure to obtain necessary regulatory approvals); and the risk that the businesses will not be integrated successfully following exercise of the call option; disruption from the transaction making it more difficult to maintain business and operational relationships; negative effects of the consummation of the transaction on the market price of U. S. Steel’s common stock; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the transaction; other business effects, including the effects of industry, market, economic, political or regulatory conditions; future exchange and interest rates; changes in tax and other laws, regulations, rates and policies; future business combinations or disposals; and competitive developments.  All forward-looking statements rely on a number of assumptions, estimates and data concerning future results and events and are subject to a number of uncertainties and other factors, that could cause actual results to differ materially from those reflected in such statements. Accordingly, U. S. Steel cautions that the forward-looking statements contained herein are qualified by these and other important factors and uncertainties that could cause results to differ materially from those reflected by such statements. For more information on additional potential risk factors, please review U. S. Steel’s filings with the SEC, including, but not limited to, U. S. Steel’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K.

About U. S. Steel

United States Steel Corporation, headquartered in Pittsburgh, Pa., is a leading integrated steel producer and Fortune 250 company with major operations in the United States and Central Europe.  For more information about U. S. Steel, please visit www.ussteel.com.

Amanda Malkowski
Corporate Communications
T - (412) 433-2512
E - [email protected]

Kevin Lewis
General Manager
Investor Relations
T - (412) 433-6935
E - [email protected]