Australia's Bluescope in Tie-Up with Nippon Steel

Australia's struggling BlueScope Steel Monday announced a U.S. $1.36 billion joint venture with Japan's Nippon Steel in a bid to tap new markets and help ease concerns over its balance sheet.

The 50-50 joint venture, NS BlueScope Coated Products, will see Nippon Steel acquire half of BlueScope's interest in its Southeast Asian and North American building products businesses.

Bluescope said the venture would generate around U.S.$540 million in net proceeds, sending its share price soaring by nearly 50 percent, before settling back to Aus$0.36, up 38 percent by mid-afternoon.

The news was a shot in the arm for the Australian steelmaker which posted a net loss of Aus$530 million for the first half of last year.

Last August it revealed a Aus$1.05 billion full year loss and announced it would cut more than 1,000 jobs and shut down its Australian export business as it struggles to cope with a soaring Australian dollar.

It said the U.S. $1.36 billion tie-up would help "capture expected growth in the $40 billion per annum building and construction sector"

"We chose to partner with NSC because it is one of the world's largest and most innovative steel companies," added Bluescope chief executive Paul O'Malley.

Nippon Steel president Shoji Muneoka said his company was "delighted".

"The global building products business has strong momentum and is well positioned to benefit from future growth throughout Asia and the U.S.," he said.

"We look forward to working closely with BlueScope to expand the product and customer base to grow earnings and maximize value for both parties."

The new venture will be headquartered in Singapore and does not include BlueScope's building products businesses in Australia, China and India.