A British metal magnate's accelerating expansion into the U.S. market gained a central Illinois foothold Monday with the announced acquisition of a steel stalwart.
GFG Alliance will purchase all outstanding shares of Keystone Consolidated Industries for $320 million in a deal expected to close by the end of the month, capping a year of rapid growth in the United States for industrialist Sanjeev Gupta.
“The Keystone acquisition is a core part of GFG's GREENSTEEL vision to become a leading U.S. producer of high quality, cleanly produced steel,” Gupta said in a prepared statement. “As we look ahead to the future, GFG will benefit from Keystone's century-long history, its robust operations, and its reputation for producing top quality steel.”
State Sen. Dave Koehler, D-Peoria, cheered the development as a positive sign for the Bartonville mill, which has been in service since 1889, and the roughly 1,000 local employees — many represented by the Independent Steelworkers Alliance union.
“The news today is great for the thousands of employees of Keystone Steel and the entire Peoria area,” Koehler said in a release. “We have always been, and will continue to be, immensely proud of our manufacturing traditions in Peoria as well as the thousands of workers that make it possible.”
A union officer did not return a message seeking comment Monday.
Koehler noted the track record of GFG Alliance subsidiary Liberty Steel USA in reinvigorating local steel operations as it executes its plan to operate in the North American marketplace.
The resurrection of the historic Georgetown steel plant in South Carolina heralded GFG's formal entry to the United States in June, when Liberty Steel CEO John Bolton told an industry conference to expect rapid acquisitions of steel mills and scrap yards.
The U.K.-based conglomerate set its sites on 5 million tons of steel capacity, Bolton told AMM's Steel Survival Strategies Conference, according to trade publication accounts of his presentation. To achieve that goal, GFG planned to invest $1 billion in 2018 and another $4 billion in years to come in both the United States and Canada.
The plans rely heavily on sourcing domestic scrap metal supplies, with GFG acquiring a Florida scrap metal operation in March to feed its South Carolina mill, according to company and media accounts of the purchases.
The GFG Alliance also articulated its preference to power its operations with renewable energy and has invested in sources such as hydroelectric assets for an aluminum smelter in Scotland. A similar model could be adapted for the United States.
The acquisition announced Monday includes all of Dallas-based Keystone Consolidated Industries subsidiaries, with operations in Illinois, Ohio, South Carolina, Texas, New Mexico and Georgia.
The Bartonville mill produces a broad variety of steel billet and wire rod for an array of finished products such as fencing and rebar.
Source: Peoria Journal Star