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Cleveland Cliffs to Acquire ArcelorMittal USA

Steel News - Published on Tue, 29 Sep 2020

Image Source: Cleveland Cliffs ArcelorMittal USA
Cleveland-Cliffs Inc has entered into a definitive agreement with ArcelorMittal, pursuant to which Cleveland-Cliffs will acquire substantially all of the operations of ArcelorMittal USA LLC and its subsidiaries for approximately USD 1.4 billion. Upon closure of the transaction, Cleveland-Cliffs will be the largest flat-rolled steel producer in North America, with combined shipments of approximately 17 million net tons in 2019. The company will also be the largest iron ore pellet producer in North America, with 28 million long tons of annual capacity. ArcelorMittal USA will be acquired by Cleveland-Cliffs on a cash-free and debt-free basis, with a combination of 78.2 million shares of Cleveland-Cliffs common stock, non-voting preferred stock with an approximate aggregate value of USD 373 million, and USD 505 million in cash. The enterprise value of the transaction is approximately USD 3.3 billion, which takes into consideration the assumption by Cleveland-Cliffs of pension/OPEB liabilities and working capital.

In 2018 and 2019, ArcelorMittal USA averaged annual revenues of approximately USD 10.4 billion and annual adjusted EBITDA of approximately USD 700 million. The assets acquired include 6 steelmaking facilities, 8 finishing facilities, 2 iron ore mining and pelletizing operations, and 3 coal and cokemaking operations. The facilities included in the transaction are:

Steelmaking: Indiana Harbor, Burns Harbor, Cleveland, Coatesville, Steelton, Riverdale

Finishing: Columbus, Conshohocken, Double G. Coatings JV (ArcelorMittal USA’s 50% interest), Gary Plate, I/N Tek JV with Nippon Steel (ArcelorMittal USA’s 60% interest), I/N Kote JV with Nippon Steel (ArcelorMittal USA’s 50% interest), Piedmont, Weirton

Mining and Pelletizing: Hibbing JV (ArcelorMittal USA’s 62.3% interest), Minorca

Met Coal / Cokemaking: Monessen, Princeton

The acquisition does not include ArcelorMittal's Dofasco integrated facility in Canada, the Calvert processing facility in Alabama, a 50:50 joint venture between ArcelorMittal and Japan's Nippon Steel, or ArcelorMittal Mexico. ArcelorMittal will also retain its R&D programme and innovation centres

The transaction has been approved by the board of directors of both companies and is expected to close in the fourth quarter of 2020, subject to the receipt of regulatory approval and the satisfaction of other customary closing conditions.

Source :

Posted By : Yogender Pancholi on Tue, 29 Sep 2020
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