Cleveland-Cliffs will become the largest
steel manufacturer in North America after
acquiring ArcelorMittal USA
MarketLine 28 September 2020 (Last Updated September 28th, 2020 16:44)
Share Article
Iron pellet producer, Cleveland-Cliffs, has entered a definitive agreement for the
acquisition of all ArcelorMittal US operations.
Cleveland-Cliffs to become leading player in the US steel
industry
The acquisition will be transformative for Cleveland-Cliffs, who will gain access to
attractive high end markets with a particular focus on the US automotive industry.
Prior to the acquisition, ArcelorMittal accounted for 50% of Cleveland-Cliffs’s
product revenue.
The company’s new scale and industry footprint will allow the company to make cost
improvements and optimise its assets. With both companies already engaged in a
strong relationship, they display high synergistic potential, which will help their
integration.
Cleveland-Cliffs delivered 5.3mm tonnes of flat-rolled steel in 2019. When combined
with Arcelor Mittal the group would have produced 16.5mm tonnes, making it the
largest producer of flat-rolled steel in North America.
In 2019, ArcelorMittal USA generated revenues of $9.9bn, significantly higher than
the $1.99bn generated by Cleveland-Cliffs.
Cleveland-Cliffs first entered the US steel industry in March 2020 after it completed
the acquisition of AK Steel Holding Corporation. The purchase of AK steel created a
vertically integrated iron ore and steel company.
ArcelorMittal will diversify business with equity
considerations
The nature of the deal allows the world’s largest steel maker to consolidate and
diversify its business in the US and become less vulnerable to volatility in the steel
industry.
Under the conditions of the agreement, ArcelorMittal will receive an equity value
consideration of $1.4bn, including a $505m upfront cash payment and the rest paid in
in the form of equity.
https://www.mining-technology.com/comment/cleveland-cliffs-steel-manufacturer/
Also see
http://www.clevelandcliffs.com/English/news-center/news-releases/news-releasesdetails/2020/Cleveland-Cliffs-Inc.-Completes-Acquisition-of-ArcelorMittal-USA/default.aspx