ArcelorMittal USA Repositions its North American Footprint

SEATTLE (Scrap Monster): ArcelorMittal USA announced its decision to separate its steelmaking assets in the country and reposition its North American footprint.

The company has entered into a definitive agreement with Cleveland-Cliffs Inc., by which the latter will acquire 100% of the shares of ArcelorMittal USA for a sum of $1.4 billion. Out of this, $505 million will be paid upfront as cash. The remaining of the consideration will be in the form of equity. Further to the closure of the deal, Cleveland-Cliffs will assume the net liabilities, pensions and other post-employment benefit liabilities of ArcelorMittal USA, totalling around $2 billion.

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The transaction is expected to reposition ArcelorMittal’s North American platform, which will continue to offer its services through its strategic assets located in Canada, Mexico and the U.S. Also, the R&D programme and innovation centres will be maintained.

The company declared its intention to redistribute $500 million of the cash proceeds to shareholders through a share buyback programme. The programme, which commenced yesterday, will go on until 31^st March 2021 or as long as the full $500 million is fully utilized, whichever occurs first.

The combined entity is expected to generate approximately $150 million in annual cost synergies.

ArcelorMittal USA will retain its exposure to the North American economy through its high-quality NAFTA assets.