ArcelorMittal SA, the world's largest steel producer, intends to sell its US assets to Cleveland-Cliffs Inc., the largest North American iron ore pellet producer.
Such a merger will signal a renewed commitment to the steel companies to consolidate and diversify their businesses, making them less vulnerable to fluctuations in demand. This comes after Cleveland-Cliffs bought AK Steel, a major US manufacturer of flat products made of carbon steel, including stainless steel, for $ 3 billion, including debt.
Following the merger, Cleveland-Cliffs will become the largest US sheet metal producer, with steel smelting capacity exceeding 18 million tonnes per year. In addition, its capacity for the production of iron ore raw materials will increase to about 25.4 million tons per year.
The deal will turn things around for Cleveland-Cliffs, which has a market value of $ 2.3 billion and total long-term debt at the end of June of $ 4.5 billion, according to one source.
The deal is scheduled to be completed in the fourth quarter of this year, subject to a positive verdict from the American antimonopoly authorities.
Between September 28, 2020 and March 31, 2021, ArcelorMittal intends to repurchase shares for a total maximum amount of USD 500 million.
Last year, ArcelorMittal said it intends to divest $ 2 billion in assets by mid-2021 to reduce its debt. In December, it agreed to sell 50% of its shipping business, and also sold its stake in the Brazilian steel company Gerdau.
Following the acquisition of AK Steel, which accounted for 66% of its 2019 revenues in the automotive market, Cleveland-Cliffs faced a drop in demand from its customers, who were forced to temporarily suspend new vehicle production earlier this year due to COVID-19 ...