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Cleveland-Cliffs, North America's largest producer of iron ore pellets, to acquire ArcelorMittal USA in $1.4 billion deal

Cleveland Cliffs
Posted at 8:21 AM, Sep 28, 2020

CLEVELAND — Cleveland-Cliffs Inc., one of the largest producers of iron ore and steel in North America, announced on Monday that it will buy the U.S. assets of the world’s largest steelmaker, ArcelorMittal USA, for $1.4 billion.

Following the closure of the deal, Cleveland-Cliffs will be the largest flat-rolled steel producer in North America, with combined shipments of approximately 17 million net tons in 2019. Cleveland-Cliffs will also be the largest iron ore pellet producer in North America, with 28 million tons of annual capacity.

“Steel-making 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,’ said Lourenco Goncalves, chairman of the board, president and CEO of Cleveland-Cliffs. “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.”

The acquisition includes six steel-making facilities, eight finishing facilities, two iron ore mining and pelletizing operations and three coal and coke-making operations.

ArcelorMittal USA will be acquired by Cleveland-Cliffs on a cash-free and debt-free basis. In 2018 and 2019, ArcelorMittal USA averaged annual revenues of approximately $10.4 billion. The deal is expected to close in the fourth quarter of 2020, according to the company.

“We look forward to welcoming the ArcelorMittal USA team into our organization," said Goncalves in a press release. "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 steel 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 all of our operational and financial goals.”

This is the second acquisition for Cleveland-Cliffs in less than a year, with the first one in December 2019 when the company acquired AK Steel, the leading producer of flat-rolled carbon and stainless steel products.

At its Cleveland steel-making plant, ArcelorMittal employs 1,863 people. In Warren, 174 people work at the coke-making plant.

Cleveland-Cliffs employs approximately 11,000 people across mining and steel manufacturing operations in the United States and Canada.

RELATED: Cleveland-Cliffs, North America's largest producer of iron ore pellets, acquires AK Steel