ArcelorMittal to sell US steel assets for $1.4bn
2020-09-29 10:03:45 [Print]
ArcelorMittal has agreed to sell the bulk of its US steelmaking assets to rival Cleveland-Cliffs for $1.4bn in a shares-and-cash deal that will offer a degree of consolidation in an industry long plagued by oversupply and volatility.
The Luxembourg-based group said it would receive $500m in cash and the rest in stock for a division that had revenues of $9.9bn last year and includes mines, blast furnace plants, mini-mills that recycle scrap and finishing facilities.
ArcelorMittal said the divestment would help it reduce net debt as it seeks to bolster its balance sheet, which came under strain after demand for the grey metal slumped during the pandemic and forced the company to raise $2bn in capital.
The acquisition further strengthens Cleveland-Cliffs' position following its purchase of AK Steel in a $1.1bn all-stock transaction announced last year.
The Cleveland-based company said it would become North America's largest producer of flat-rolled steel, which is used in manufactured goods from car bodies to domestic appliances, with combined shipments of 17m tonnes last year. It will also be the continent's biggest producer of iron ore pellets, a key ingredient for steelmaking, while the combination will generate an estimated $150m in annual cost savings.
The companies expect the deal to close in the fourth quarter, subject to regulatory approval. The acquisition does not include the modern Calvert processing mill in Alabama, which ArcelorMittal owns in a 50/50 joint venture with Japan's Nippon Steel.
The Luxembourg-based group said it would receive $500m in cash and the rest in stock for a division that had revenues of $9.9bn last year and includes mines, blast furnace plants, mini-mills that recycle scrap and finishing facilities.
ArcelorMittal said the divestment would help it reduce net debt as it seeks to bolster its balance sheet, which came under strain after demand for the grey metal slumped during the pandemic and forced the company to raise $2bn in capital.
The acquisition further strengthens Cleveland-Cliffs' position following its purchase of AK Steel in a $1.1bn all-stock transaction announced last year.
The Cleveland-based company said it would become North America's largest producer of flat-rolled steel, which is used in manufactured goods from car bodies to domestic appliances, with combined shipments of 17m tonnes last year. It will also be the continent's biggest producer of iron ore pellets, a key ingredient for steelmaking, while the combination will generate an estimated $150m in annual cost savings.
The companies expect the deal to close in the fourth quarter, subject to regulatory approval. The acquisition does not include the modern Calvert processing mill in Alabama, which ArcelorMittal owns in a 50/50 joint venture with Japan's Nippon Steel.
