BlueScope Steel will buy Arrium’s OneSteel sheet and coil business for around $23 million.
The steel manufacturer said the agreement included processing and distribution businesses in Sydney, Brisbane, Adelaide and Perth.
The company expects to incur integration costs of $7 million.
BlueScope chief executive Mark Vassella said the OneSteel businesses were close to BlueScope’s core Australian operations.
“The acquisitions are a further step towards improving the efficiency with which we can serve Australian customers by lowering costs through the integration of these businesses with our existing operations,” Mr Vassella, said.
BlueScope plans to complete the deal by the end of the December 2013 quarter.
The acquisition is subject to Australian Competition and Consumer Commission approval.
BlueScope manufactures and distributes steel products, steel building products and metallic coated steel products.
Both BlueScope and Arrium have turned around from major challenges to Australia’s steel industry over the past four years – cutting costs, shutting operations and diversifying to fight a post-global financial crisis slump in steel demand.
BlueScope shares dropped one cent to $4.99 and Arrium gained three cents to $1.33.