Cleveland-Cliffs To Acquire ArcelorMittal's US Business For $1.4 Billion
ArcelorMittal, the world's largest steel company, has agreed to sell its business in the United States to the American company Cleveland-Cliffs, the buyer said in a statement.
The asset value is approximately $1.4 billion. In particular, Cleveland-Cliffs must pay about $ 873 million in its own shares and $505 million in cash. The sale should be completed by the end of the year.
"After the transaction, Cleveland-Cliffs will become the largest producer of flat-rolled steel in North America (...) the Company will also become the largest producer of iron ore pellets in North America with a capacity of 28 million tons of products per year," the report said.
ArcelorMittal is the world's largest steel company registered in Luxembourg. The group was formed in 2006 by the merger of Luxembourg-based Arcelor and Indian Mittal Steel, owned by Indian businessman Lakshmi Mittal.
The American company Cleveland-Cliffs was founded in 1847 and is engaged in the production of iron ore and steel in North America. The staff is about 11 thousand people.
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 $373 million, and $505 million in cash. The enterprise value of the transaction is approximately $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 $10.4 billion and annual adjusted EBITDA of approximately $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.