AK Steel

AK Steel was an American steelmaking company whose modern corporate identity emerged from the restructuring of Armco, historically known as the American Rolling Mill Company. Founded in Middletown, Ohio, in 1899, Armco developed into an important U.S. producer of flat-rolled steel and built a long industrial relationship with automotive, infrastructure, energy and manufacturing customers. The later AK Steel name reflected both the company’s Armco heritage and the involvement of Kawasaki Steel Corporation in its corporate reorganization. The company’s main products included carbon steel, stainless steel and electrical steel, together with carbon and stainless tubing. It also supplied die design, tooling, hot-stamped components and cold-stamped components. Its products were used in vehicle bodies and components, electrical motors and transformers, infrastructure, appliances, industrial equipment and distribution channels. In 2018, automotive customers accounted for 63 percent of reported sales, while infrastructure and manufacturing represented 15 percent and distributors and converters 22 percent. AK Steel operated eight steel plants and two tube-manufacturing plants in Ashland, Kentucky; Butler, Pennsylvania; Coshocton, Ohio; Dearborn, Michigan; Mansfield, Ohio; Middletown, Ohio; Rockport, Indiana; and Zanesville, Ohio. The company also had operations in Canada and Mexico and facilities in Western Europe. Middletown Works remained closely associated with the company’s identity and with the economic life of Middletown, Ohio. The company’s history included extensive restructuring, labor disputes, environmental controversy and acquisitions. In the early 1990s, management divested unprofitable operations and reorganized the business. AK Steel Holdings Corporation was formed in 1993, moved through an initial public offering in 1994 and later acquired its former parent, Armco Inc., in 1999. It expanded through investments such as the Rockport, Indiana facility and the acquisition of assets from Severstal in 2014, followed by Precision Partners in 2017. AK Steel was listed on the New York Stock Exchange under the symbol AKS. It entered the S&P 500 in 2008 and was moved to the S&P 600 in 2011. Cleveland-Cliffs announced an agreement to acquire the company in 2019, and the transaction closed on March 13, 2020. AK Steel consequently ceased to exist as an independent public company, although its plants, capabilities, products and customer relationships continued within Cleveland-Cliffs’ operations.

AK Steel’s origins date to 1899, when George Matthew Verity and associates established the American Rolling Mill Company in Middletown, Ohio. The business expanded with Ashland Works in Kentucky in 1922 and became part of the development of the American flat-rolled steel industry. Its later history included diversification and corporate restructuring: in 1956, Armco acquired American Bantam Car Company, and in 1978 Armco Steel adopted the shorter Armco, Inc. name. The recession and steel-industry crisis of the early 1980s placed pressure on Armco and other U.S. producers. In 1989, Armco entered a limited partnership with Kawasaki Steel Corporation, which contributed production facilities. During the early 1990s the company generated substantial sales but struggled with profitability. Tom Graham and Richard M. Wardrop Jr. led a restructuring that included divestitures and management changes. In 1993, the company established AK Steel Holdings Corporation, moved its headquarters to Pittsburgh and sold its Kansas City Bolt and Nut operation. It became publicly traded through an initial public offering in March 1994, using proceeds in part to reduce debt, and returned its headquarters to Middletown in 1995. In 1996, AK Steel committed approximately $1.1 billion to a new steelmaking facility in Rockport, Indiana. The same period brought scrutiny over worker safety, including reported fatalities and Occupational Safety and Health Administration action. In 1999, AK Steel acquired its former parent, Armco Inc., for approximately $1.3 billion. Labor relations remained difficult. A dispute at Mansfield involved a lockout and prolonged disagreement with United Steelworkers employees, while a separate Middletown Works lockout began in March 2006 and affected about 2,700 workers. The Middletown dispute ended with a settlement and contract ratification in 2007. The company moved its headquarters to West Chester Township in 2007. It expanded its portfolio through the 2014 purchase of Severstal assets in Dearborn and the 2017 acquisition of Precision Partners. Its business combined commodity and value-added flat-rolled products with electrical steel, stainless steel, tubing, tooling and stamped components. Automotive demand was particularly important, although the company also served infrastructure, energy, industrial and distribution markets. AK Steel also faced environmental criticism and regulatory action. Matters discussed in the company’s public history included releases involving Butler Works, PCB contamination associated with Middletown, and criticism of chemical discharges into Ohio waterways. The company reported a compliance rate above 99.99 percent for air and water in 2018, but its environmental record remained contested by regulators and environmental organizations. Cleveland-Cliffs agreed to acquire AK Steel in 2019. The acquisition closed on March 13, 2020, for a transaction publicly described at approximately $1.1 billion. AK Steel’s separate listing and corporate identity ended, while its facilities and product capabilities were absorbed into Cleveland-Cliffs.

1. 2020Acquisition by Cleveland-Cliffs completed

   AK Steel became part of Cleveland-Cliffs and ceased independent public-company operations.

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2. 2017Precision Partners acquired

   The acquisition broadened AK Steel’s tooling, engineering and component capabilities.

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3. 2014Severstal assets acquired

   AK Steel purchased Dearborn steelmaking and related processing interests.

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4. 2007Headquarters moves to West Chester Township

   AK Steel relocated its headquarters to Butler County, Ohio.

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5. 1999Armco Inc. is acquired

   AK Steel acquired its former parent company for approximately $1.3 billion.

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6. 1996Rockport investment announced

   The company committed approximately $1.1 billion to a new production facility in Rockport, Indiana.

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7. 1994Initial public offering

   AK Steel became a public company and used IPO proceeds to reduce debt.

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8. 1993AK Steel Holdings Corporation is established

   The reorganized business adopted the AK Steel identity and moved its headquarters to Pittsburgh.

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9. 1989Armco forms a partnership with Kawasaki Steel

   Armco entered a limited partnership in which Kawasaki contributed production facilities.

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10. 1922Ashland Works opens

    The company opened a second production facility in Ashland, Kentucky.

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11. 1899American Rolling Mill Company is founded

    George Matthew Verity founded the predecessor company in Middletown, Ohio.

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A U.S. producer of value-added flat-rolled and specialty steels serving automotive, infrastructure, energy, manufacturing, distribution and converter customers.

• Carbon steelFlat-rolled steel

  AK Steel’s carbon-steel portfolio served automotive bodies and components, infrastructure, general manufacturing, distributors and converters. The company produced flat-rolled grades for applications requiring different combinations of formability, strength, surface quality and processing performance.

• Stainless steelSpecialty steel

  Stainless steel was supplied for applications where corrosion resistance, durability and controlled mechanical properties were important. It supported industrial, manufacturing, automotive and other customers requiring more specialized performance than conventional carbon steel.

• Electrical steelElectrical steel

  AK Steel produced electrical steels used in magnetic components such as motors, generators and transformers. This line was strategically important because electrical steel is a specialized material whose performance affects energy efficiency and equipment design.

• Carbon and stainless tubingTubular products

  The company operated tube-manufacturing plants and supplied carbon and stainless tubing for industrial and manufacturing applications. Tubular products extended AK Steel beyond sheet and strip into formed and fabricated steel solutions.

• Stamped components, tooling and diesAutomotive and engineered components2017

  Through its component and engineering activities, including Precision Partners, AK Steel provided die design, tooling and hot- and cold-stamped components. These capabilities allowed it to participate in more stages of automotive and industrial customers’ manufacturing processes.

• 2019Agree to Cleveland-Cliffs acquisitionM&A

  The U.S. steel sector was undergoing consolidation, and the transaction offered a larger combined platform for mining, steelmaking and downstream products.

  What changed. AK Steel agreed to be acquired by Cleveland-Cliffs in a cash-and-stock transaction.

  Aftermath. The acquisition closed on March 13, 2020, ending AK Steel’s independent listed status.

  Transaction value. Approximately $1.1 billion (2020 closing)

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• 2017Acquire Precision PartnersM&A

  AK Steel aimed to broaden its offering beyond steelmaking into engineered products and manufacturing services.

  What changed. The company acquired Precision Partners Holding Company.

  Aftermath. AK Steel added tooling, die design and stamped-component capabilities.

  Acquisition price. $360 million (2017)

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• 2014Acquire Severstal’s Dearborn assetsM&A

  AK Steel pursued greater scale and integration in flat-rolled steel and related processing.

  What changed. It acquired steelmaking assets, a coke-making facility and interests in three joint ventures from Severstal.

  Aftermath. The transaction expanded AK Steel’s manufacturing presence in Dearborn, Michigan.

  Acquisition price. $700 million (2014)

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• 1996Build the Rockport steel facilityStrategy

  AK Steel sought to strengthen its production base and modernize its asset portfolio during a period of restructuring and competitive pressure in U.S. steel.

  What changed. The company committed approximately $1.1 billion to construct a new steel production facility in Rockport, Indiana.

  Aftermath. Rockport became one of the company’s principal production locations.

  Planned capital investment. Approximately $1.1 billion (1996)

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• 2006Middletown PCB contamination settlementControversy

  AK Steel reached a settlement concerning PCB contamination in Middletown, Ohio, including cleanup work estimated at approximately $12–13 million.

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• 2006Middletown Works labor lockoutControversy

  AK Steel locked out approximately 2,700 workers during a contract dispute. The conflict lasted about a year and ended with a 2007 agreement, ratification and a broader settlement of related litigation.

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• 2000Butler Works environmental enforcement actionControversy

  The U.S. Environmental Protection Agency issued an emergency order concerning alleged releases of nitrate and nitrite compounds and inadequate handling of hexavalent chromium at Butler Works in Pennsylvania. The matter was settled in 2004, with AK Steel agreeing to pay $1.2 million.

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• 2020Cleveland-Cliffs completes acquisition of AK Steel

  Cleveland-Cliffs acquired AK Steel, ending its independent existence as a listed company.

  M&ALeadership change
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• 2019AK Steel receives recognition from General Motors and Ford

  General Motors named AK Steel its Supplier of the Year for Non-Fabricated Steel for a second consecutive year, while Ford presented the company with a Smart Pillar Award.

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• 2017AK Steel acquires Precision Partners

  The company acquired Precision Partners Holding Company, expanding its engineering, tooling and stamped-component capabilities.

  M&A
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• 2014AK Steel acquires Severstal steel assets

  AK Steel acquired steelmaking assets, a coke facility and interests in three flat-rolled processing joint ventures in Dearborn, Michigan, from Severstal.

  M&A
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• 2011AK Steel moves from the S&P 500 to the S&P 600

  The company was removed from the S&P 500 and added to the S&P 600.

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• 2008AK Steel enters the S&P 500

  AK Steel was added to the S&P 500 index.

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1. AK Steel