Cleveland-Cliffs to Acquire ArcelorMittal USA for Around $1.4 Billion
September 28 2020 - 2:47AM
Dow Jones News
By Giulia Petroni
ArcelorMittal said Monday that Cleveland-Cliffs Inc. would
acquire all of the shares of ArcelorMittal USA LLC for a
consideration of approximately $1.4 billion, and added that it
would begin a share-buyback program.
The Luxembourg-based steel-and-mining company said about
one-third of the consideration will be paid in cash upfront, while
the remaining two-thirds in the form of equity. The enterprise
value of the transaction is approximately $3.3 billion.
Under the transaction, Cleveland-Cliffs Inc. is set to assume
ArcelorMittal USA's liabilities, which include net liabilities of
around $500 million and pensions and other post-employment benefit
liabilities valued at $1.5 billion.
This is expected to improve ArcelorMittal's risk profile and
capital structure, reducing its net debt. The company said it aims
to redistribute $500 million of the cash proceeds to shareholders
through a share-buyback program that starts on Monday.
ArcelorMittal added that it would participate in the future
value creation of the combined entity through its minority
shareholding. The entity is expected to generate around $150
million of annual cost synergies.
The transaction is expected to close within the fourth quarter
of 2020, subject to regulatory approvals and customary closing
conditions.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
September 28, 2020 02:32 ET (06:32 GMT)
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