BlueScope Steel, Australia's largest steelmaker and owner of the New Zealand Steel mill, has agreed to buy assets of Fletcher Building's Pacific Steel in a $120 million deal that will lead to the closure of Fletcher's steel mill at Otahuhu at the end of 2015.
The transaction will leave BlueScope as the nation's only steelmaker and requires approval from the Commerce Commission. The companies are aiming to complete the transaction in mid-2014.
Melbourne-based BlueScope will pay $60 million for Pacific Steel's long-products rolling and marketing operations and pay about $60 million for the target's working capital, according to a statement from Auckland-based Fletcher, which expects to record a significant expense item of up to $19 million.
Bluescope will pay half the $60 million price of the assets upfront and the remainder once it has commissioned a new billet caster, expected to be by the end of calendar 2015.
The sale includes Pacific Steel's rolling mill and wire drawing facilities in Otahuhu together with its Fijian rolling mill, Fletcher said in an announcement to the NZX this morning.