Steelmaker Cleveland-Cliffs Inc. has entered into a definitive agreement with ArcelorMittal S.A. to buy all operations of ArcelorMittal USA LLC and its subsidiaries in a deal estimated at $1.4 billion.
The stock and cash still requires approval from regulators as well as from both the ArcelorMittal and Cleveland-Cliffs boards of directors but is expected to close before the end of the year, Cleveland-Cliffs Inc. said in a Sept. 28 statement.
Cleveland-Cliffs said acquiring ArcelorMittal USA will make it 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 operates numerous facilities across the Region. The assets acquired include six steelmaking facilities, eight finishing facilities, two iron ore mining and pelletizing operations, and three coal and cokemaking operations.
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
- Warren
Cleveland-Cliffs said in 2018 and 2019, ArcelorMittal USA averaged annual revenues of about $10.4 billion.
Lourenco Goncalves, chairman of the board, president and CEO of Cleveland-Cliffs, will lead the expanded organization.
“Steelmaking is a business where production volume, operational diversification, dilution of fixed costs, and technical expertise matter above all else, and this transaction achieves all of these,” he 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.”
Cleveland-Cliffs said the purchase will improve its operational capabilities and help control costs and increase its access to the automotive end market. The company projects combining operations will generate about $150 million in estimated annual cost savings.
ArcelorMittal in a statement said it will retain its R&D programs and innovation centers to maintain its product and process development.
