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Cleveland-Cliffs To Buy ArcelorMittal USA In $1.4 Bln Deal - Quick Facts

Cleveland-Cliffs Inc. (CLF) announced Monday that it has entered into a definitive agreement with ArcelorMittal S.A. (MT) to acquire substantially all of ArcelorMittal USA LLC for approximately $1.4 billion.

The acquisition is anticipated to be earnings per share accretive.

The enterprise value of the deal is around $3.3 billion, which takes into consideration the assumption by Cleveland-Cliffs of pension/OPEB liabilities and working capital.

The acquisition will be on a cash-free and debt-free basis, with a combination of 78.2 million shares of Cleveland-Cliffs common stock, non-voting preferred stock with an approximate aggregate value of $373 million, and $505 million in cash.

The assets acquired include 6 steelmaking facilities, 8 finishing facilities, 2 iron ore mining and pelletizing operations, and 3 coal and cokemaking operations.

The transaction has been approved by the board of directors of both companies. The deal is expected to close in the fourth quarter of 2020, subject to the receipt of regulatory approval and the satisfaction of other customary closing conditions.

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

In 2018 and 2019, ArcelorMittal USA averaged annual revenues of around $10.4 billion and annual adjusted EBITDA of approximately $700 million.

The acquisition is also expected to increase the company's liquidity substantially due to an increased ABL borrowing base.

Following the deal, Lourenco Goncalves, Chairman of the Board, President and CEO of Cleveland-Cliffs, will lead the expanded organization.

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