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Steel Dynamics to acquire Mexican ferrous, nonferrous recycler

The acquisition will help Steel Dynamics with its procurement strategy to support its flat-roll steel mill in Texas.

Steel Dynamics Inc. (SDI), Fort Wayne, Indiana, has announced that it has entered into a definitive agreement to acquire 100 percent of the equity interest of Zimmer S.A. de C.V., Monterrey, Mexico, to be funded entirely with available cash. Zimmer operates a ferrous and nonferrous scrap metals recycling business.

According to a news release from SDI, the acquisition will help with its procurement strategy to support its new Texas flat-roll steel mill in Sinton, Texas. The company announced plans to build this electric arc furnace (EAF) steel mill in July 2019.

Zimmer’s primary operations include six scrap processing facilities positioned near high-volume industrial scrap sources located throughout central and northern Mexico. The company also operates several third-party scrap processing locations. These combined facilities currently ship about 500,000 tons of scrap annually and have the ability to process approximately 2 million tons annually, SDI reports.

“We look forward to welcoming Zimmer to the Steel Dynamics family to further solidify our Southwest U.S. and Mexico growth strategy,” says Mark D. Millett, president and chief executive officer at SDI. “Combined with our existing metals recycling presence in Mexico, the addition of Zimmer provides an expanded commercial presence in the region and strengthens our raw material supply strategy, allowing for cost-effective ferrous scrap procurement for our new Texas flat-roll steel mill. Zimmer provides a platform to grow our metals recycling presence in Mexico, representing a meaningful achievement in our raw material sourcing strategy for our Texas steel mill, which is currently under construction and expected to begin operations midyear 2021.”

According to SDI, this transaction is subject to customary closing conditions and receipt of required regulatory approvals.