U.S. Steel executes Option Agreement for potential joint venture with Stelco Inc. to acquire 25% interest in Minntac at enterprise value of $2.4 billion
Clients United States Steel Corporation
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.
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, valuing the Minntac Mine at $2.4 billion.
Subject to the terms and conditions of the Option Agreement, Stelco may exercise the option at any time beginning on the date of the final installment payment (anticipated to be December 31, 2020) through January 31, 2027 (unless earlier terminated in accordance with the option agreement).