The steel giant soars on the stock market after announcing the operation with Cleveland-Cliffs, which will be carried out through a combination of cash and shares
ArcelorMittal has agreed on Monday the sale of its division in the United States to Cleveland-Cliffs for an amount of 1,400 million dollars (1,204 million euros), as reported by the steel giant on Monday. Approximately one-third of the consideration is cash up-front, $ 505 million (€ 434 million), with the remaining two-thirds being realized through 78.2 million Cleveland-Cliffs common shares worth 500 million dollars (429 million euros) and non-voting preferred shares exchangeable for approximately 58 million Cleveland-Cliffs common shares with an aggregate value of 373 million dollars (320 million euros) or an equivalent amount in cash.
The market reception to the transaction was very good: ArcelorMittal shares began the session this Monday with a rise of more than 7% and led the gains of the Ibex 35 in a clearly bullish session.
When the operation is completed, Cleveland-Cliffs – which will assume the debt of ArcelorMittal’s division in the United States – will become the first manufacturer of flat rolled steel in the North American country, with a production volume of 17 million tons, according to the 2019 data. It will also be North America’s leading producer of iron ore pellets. Cost synergies will amount to about $ 150 million a year, according to figures provided by ArcelorMittal.
In 2018 and 2019 as a whole, the US division of the Luxembourg-based company recorded revenues of $ 10.4 billion (€ 8.937 billion), as well as a gross operating profit (Ebitda) of around $ 700 million (601 million euros). The company operates six steel mills, eight finishing lines, two iron mining and pelletizing operations, and three coal and coke plants in the country.