Steel producer, Nucor Corporation (NUE - Free Report) has completed the acquisition of Skyline Steel LLC and its affiliates – a steel-foundation manufacturing and distribution subsidiary of the steel giant ArcelorMittal (MT - Free Report) – for a total sum of approximately $605 million.
Post-acquisition, Skyline Steel LLC will be Nucor’s wholly owned subsidiary and will function from the company’s existing headquarters in Parsippany, New Jersey. However, it will continue to exclusively distribute ArcelorMittal's piling and foundation products in North America and the Caribbean. Nucor expects the acquisition to be accretive in the next fiscal year.
Skyline Steel has been distributing Nucor’s piling products for over 20 years and has been a key customer of H-piling and hot rolled sheet piling from Nucor-Yamato Steel. Through the acquisition, Nucor aims to integrate Skyline into its system and make it a more valuable downstream customer of coiled plate and sheet products. In addition, the company expects the technological know how of both the companies to help them with innovative solutions for the construction industry.
Skyline has an impressive distribution network, well complemented by exceptional customer service and technical back up. The company has 21 sales offices and a strong infrastructure comprising of a large number of stocking sites, robust supply chain and numerous processing and fabrication facilities.
Skyline’s distribution network serves the U.S., Canada, Mexico and the Caribbean markets, providing solutions for application in heavy civil construction, marine construction, underground commercial parking, storm protection, bridge and highway construction and environment containment projects in the infrastructure and construction industries. Therefore, Nucor made a smart move towards inorganic growth since Skyline’s excellent network will enable it to expand in North America.
Nucor Corp. faces stiff competition from Commercial Metals Co. (CMC - Free Report) and United States Steel Corp. (X - Free Report) . The stock currently holds a short-term Zacks #5 Rank, which translates to short term Strong Sell rating.