Cleveland-Cliffs Acquiring ArcelorMittal USA
Cleveland-Cliffs mining company plans to purchase the U.S. branch of ArcelorMittal, the parent company of Cleveland’s largest steel plant, for about $1.4 billion, the companies announced Monday.
Updated: 2:32 p.m., Monday, Sept. 28, 2020
If approved by regulators, the Cleveland-based company will acquire five steelmaking plants in addition to the one in Cleveland, along with eight finishing plants and two iron ore mines.
“The benefits of this business combination are clear to those who follow and understand our industry,” Cleveland-Cliffs CEO Lourenco Goncalves said during a conference call Monday. “Combining Arcelor Mittal’s sizable U.S.A. steelmaking franchise with our legacy pellet business and AK Steel footprint takes us where we need to be.”
According to Goncalves, the purchase will make the publicly traded company North America’s largest producer of both flat-rolled steel and iron ore pellets, which are used in steel production.
Cleveland-Cliffs has been a raw materials supplier for the ArcelorMittal plant in Cleveland for decades, Goncalves said, including for the facility’s previous owner.
The acquisition of West Chester, Ohio-based steelmaker AK Steel in a $1.1 billion deal finalized early this year – which got Cleveland-Cliffs into the steelmaking business – and COVID-19’s effects on the industry and manufacturing made this deal possible, he added.
“The opportunity to achieve more together as combined entities has always been there, even though we were not able to explore that until now,” Goncalves said.
ArcelorMittal, the world’s largest steel producer, has struggled during the pandemic, laying off 454 workers at its Cleveland plant in July. Goncalves did not comment on if Cleveland-Cliffs would close or downsize any of the 25 plants it will acquire in the deal.
The union representing workers at the Cleveland plant, United Steelworkers Local 979, said they haven’t been in contact with either ArcelorMittal or Cleveland-Cliffs about how the sale might affect local workers.
ArcelorMittal reported a $606 million loss for all global operations in the first half of 2020.
Low demand for steel during the pandemic, as energy production, auto-making and other steel-dependent industries have seen major downturns, has driven the biggest disruption to the market since World War II, according to the International Energy Agency. Standard and Poor’s predicts a 25 percent decline in auto sales for 2020 before starting to rebound in 2021.
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