US iron ore and steel producer Cleveland-Cliffs has inked a $1.4 billion deal to acquire the bulk of ArcelorMittal USA’s assets, Kallanish reports.
After the deal closes in the fourth quarter, Cleveland-Cliffs will be the largest North American steel producer with a 17 million short tons/year capacity, based on 2019 figures. It will also be the continent’s largest iron ore pellet producer, with a capability of 28m long tons/y.
“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,” says Cleveland-Cliffs ceo Lourenco Goncalves. “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 US assets.”
Goncalves adds that the acquisition has the support of the United Steelworkers and United Auto Workers labour unions.
“The acquisition of ArcelorMittal USA amplifies our position in the discerning automotive steel marketplace, and further improves our position in important US markets such as construction, appliances, infrastructure, machinery and equipment,” he says. “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 all of our operational and financial goals.”
ArcelorMittal notes in a separate release that the transaction does not include its Hamilton, Ontario, Dofasco facility, ArcelorMittal Mexico, or the legacy AM/NS mill in Calvert, Alabama.
“This transaction is a unique opportunity for ArcelorMittal to unlock significant value for shareholders while retaining exposure to the North American economy through our high-quality NAFTA assets alongside a participation in what will be a stronger, better integrated, US business,” says ceo Lakshmi Mittal. “I would like to thank all employees of ArcelorMittal USA for their hard work in ensuring the business maintained its reputation as a trusted, quality supplier of steels for American manufacturing. I am confident you will have a bright future with Cleveland-Cliffs.”