BlueScope Steel buys Fletcher Building in New Zealand

BlueScope Steel, Australia's largest steelmaker and owner of a New Zealand steel mill, will buy the assets of Fletcher Building's Pacific Steel under a $ 120 million contract. The deal will result in the closure of the Fletcher steel mill in Otahuhu at the end of 2015.

The deal strengthens BlueScope's position as the country's main steelmaker and requires approval from the Trade Commission. The companies are aiming to complete the deal in mid-2014.
BlueScope will pay $ 60 million for Pacific Steel's long-term products and marketing operations and will contribute approximately $ 60 million in working capital, according to a statement from Fletcher in Oakland, which will generate a one-time net profit of approximately $ 19 million.

Bluescope will pay half of the $ 60 million upfront for the assets and the rest as soon as it commissions the new section caster, which is expected by the end of 2015.
The Australian company will build a long caster south of Auckland under its NZ Steel block, investing about $ 50 million in the new plant. Until then, Fletcher will continue to operate and supply BlueScope products on a commercial basis. The Glenbrook plant is essentially set up to process metal, 50 percent of which is owned by the Sims Pacific Metals business.

The sale includes wire mills and its Pacific Steel rolling mill at Otahuhu. Once the BlueScope section caster is operational, NZ Steel will supply billets for rolling mills in Otahuhu and Fiji. Workers will be offered positions from BlueScope.