Nucor Buys Steel Rack Maker to Tap Into Booming Warehouse Growth
(Bloomberg) -- Nucor Corp., the largest U.S. steelmaker, is spending $370 million to go deeper into the booming warehouse business by agreeing to buy steel-rack producer Hannibal Industries Inc.
The deal gives Nucor a closely held company that has manufacturing facilities in Houston and Los Angeles and three distribution centers, the Charlotte, North Carolina-based steelmaker said Tuesday in a statement. Racking is one of the most steel-intensive parts of a warehouse. The move comes as Amazon.com Inc. continues beefing up the number of warehouses it operates to compete with rivals Walmart Inc. and Target Corp. on same-day delivery in a booming e-commerce market.
“This acquisition reflects our strategy of expanding beyond our core steel businesses and establishes a new area for Nucor to pursue a market leadership position,” Chief Executive Officer Leon Topalian said in the statement.
Both companies use sheet and bar steel as well as other steel products to make racking, which will give Nucor’s other businesses potential supply-chain efficiencies. Nucor reports earnings on July 22 and analysts expect a record-breaking quarterly profit amid the greatest metal rally in a generation. Shares rose 1.3% to $91.17 at 10:39 a.m. in New York.
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