Inc. announced just before deadline today that it has entered into a
definitive agreement with ArcelorMittal to acquire substantially all of the
operations of ArcelorMIttal USA and its subsidiaries for approximately $1.4
On closure of this
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.
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-voted preferred stock with an approximate aggregate value of $373
million, and $505 million in cash,” Cleveland-Cliffs said. “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--which owns the Burns Harbor facility--averaged annual
revenues of approximately $10.4 billion and annual adjusted EBITDA of
approximately $700 million. The assets acquired include six steelmaking
facilities, eight finishing facilities, two iron ore mining and pelletizing
operations, and three coal and cokemaking operations.
“Steelmaking is a
business where production volume, operational diversification, dilution of
fixed costs, and technical expertise matter above all else,”
Cleveland-Cliffs President, Chair, and CEO Lourenco Goncalves said.
“ArcelorMittal is a world-class organization that we have long admired as
our customer and our partner, and we know for a fact that they have taken
good care of their U.S. assets.”
“We look forward to
welcoming the ArcelorMIttal USA team into our organization,” Goncalves
added. “We are creating an exceptional company, based on great people and
supported by our existing strong relationship with the United Steelworkers,
the United Auto Workers, and the Machinists unions. The acquisition of
ArcelorMittal USA amplifies our position in the discerning automotive
marketplace, and further improves our position in important U.S. markets
such as construction, appliances, infrastructure, machinery, and equipment.
It also adds to our strong legacy raw material profile and growing finishing
capabilities. The transaction will enable us to become a more efficient
fully-integrated steel system, with the ability to realize our operational
and financial goals.”
The transaction has
been approved by the board of directors of both companies and is expected to
close in the fourth quarter 2020, subject to the receipt of regulatory
approval and the satisfaction of other customary closing conditions.
Founded in 1847,
Cleveland-Cliffs is among the largest vertically integrated producers of
different iron ore and steel in North America. The company is headquartered
in Cleveland, Ohio, and employs around 11,000 people across mining and steel
manufacturing operations in the U.S. and Canada.