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Researched by Industrial Info Resources (Sugar Land, Texas)--With the stroke of a pen, along with $1.4 billion in cash and equities payments to ArcelorMittal S.A. (NYSE:MT) (Luxemburg City, Luxemburg), Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) plans to become the largest producer of flat-rolled steel and iron ore pellets in North America.
The companies announced a deal on Monday for Cleveland-Cliffs to acquire the operations of ArcelorMittal subsidiary, ArcelorMittal USA LLC. The assets include six steelmaking facilities, eight finishing facilities, two iron ore mining and pelletizing operations, and three coal and coke-making operations. Click here for a list of Cleveland-Cliffs plant profiles and here for a list of ArcelorMittal USA plant profiles.
Industrial Info is tracking 21 active capital Cleveland-Cliffs and ArcelorMittal projects in the U.S. worth $2.19 billion.
Click on the image at right for a graph showing the project activity by type.
The deal, to be completed in the fourth quarter this year, follows Cleveland-Cliffs' $1.1 billion acquisition of AK Steel Holding Corporation in early 2020 as part of its plans to become a vertically integrated iron and steel firm. For more information, see December 4, 2019, article - Cleveland-Cliffs-AK Steel Combo to Create Iron-Ore-to-Finished-Steel Maker in Great Lakes Region and February 26, 2020, article - Cleveland-Cliffs Looks to AK Steel Acquisition, New HBI Plant for Positive Outlook in 2020.
"This is definitely big news for the U.S. steel industry, which continues to consolidate and modernize to meet changing demand for high strength steel in the automotive and other industries," commented Joseph Govreau, Vice President Research Metals & Minerals Industry for Industrial Info.
With the new acquisition, Cleveland-Cliffs will have a workforce of 25,000 employees, Chief Executive Officer Lourenco Goncalves said in a Monday conference call with industry analysts.
The deal will result in a "U.S.-centric company with more than 40 production facilities, encompassing all areas of this supply chain, (that) provides us with a level of operational and operational optionality that cannot be replicated," said Goncalves, who will remain at the helm of the company. The company would have the capacity to produce 16.5 million tons per year of flat-rolled steel, and 28 million tons per year of iron ore pellets.
Among other things, Cleveland-Cliffs will be adding three integrated steel operations with a combined capacity of 16.2 million tons per year, including ArcelorMittal's Cleveland facility in Ohio, and the Indiana Harbor and Burns Harbor complexes, both in Indiana.
"Furthermore, the seven blast furnaces we are adding to our portfolio expand our options in becoming a [...] future supplier of merchant pig iron to other companies in our space [...] if and when we decide to do so," Goncalves said. Cleveland-Cliffs also will acquire two electric arc furnace mills that will expand its end-market exposure to plate and rail products, he said.
In addition, the acquisition will bring two more iron mining and pelletizing facilities, both in Minnesota, under the Cleveland-Cliffs umbrella.
"Finally, we are adding to our already best-in-class finishing profile with eight facilities that have phenomenal capabilities...which is of utmost importance to expand upon for a strong position in the demanding automotive market," Goncalves said.
Goncalves also said during the conference call that the startup of the company's new hot-briquetted iron plant in Toledo, Ohio, was within weeks of startup. The 1.9 million-ton-per-year facility will supply iron to electric arc furnaces. For more information, see Industrial Info's project report.
ArcelorMittal said it will maintain assets in Canada and Mexico, along with the AM/NS Calvert joint venture with Nippon Steel Corporation (Tokyo, Japan) in Alabama. ArcelorMittal announced plans in August to build a 1.5 million-ton-per-year electric arc furnace at the steel mill. For more information, see Industrial Info's project report.
The deal will allow ArcelorMittal to get rid of about $500 million in net liabilities, including pensions, the company said, adding it intends to redistribute $500 million in cash proceeds to shareholders through a share buyback program.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The companies announced a deal on Monday for Cleveland-Cliffs to acquire the operations of ArcelorMittal subsidiary, ArcelorMittal USA LLC. The assets include six steelmaking facilities, eight finishing facilities, two iron ore mining and pelletizing operations, and three coal and coke-making operations. Click here for a list of Cleveland-Cliffs plant profiles and here for a list of ArcelorMittal USA plant profiles.
Industrial Info is tracking 21 active capital Cleveland-Cliffs and ArcelorMittal projects in the U.S. worth $2.19 billion.
The deal, to be completed in the fourth quarter this year, follows Cleveland-Cliffs' $1.1 billion acquisition of AK Steel Holding Corporation in early 2020 as part of its plans to become a vertically integrated iron and steel firm. For more information, see December 4, 2019, article - Cleveland-Cliffs-AK Steel Combo to Create Iron-Ore-to-Finished-Steel Maker in Great Lakes Region and February 26, 2020, article - Cleveland-Cliffs Looks to AK Steel Acquisition, New HBI Plant for Positive Outlook in 2020.
"This is definitely big news for the U.S. steel industry, which continues to consolidate and modernize to meet changing demand for high strength steel in the automotive and other industries," commented Joseph Govreau, Vice President Research Metals & Minerals Industry for Industrial Info.
With the new acquisition, Cleveland-Cliffs will have a workforce of 25,000 employees, Chief Executive Officer Lourenco Goncalves said in a Monday conference call with industry analysts.
The deal will result in a "U.S.-centric company with more than 40 production facilities, encompassing all areas of this supply chain, (that) provides us with a level of operational and operational optionality that cannot be replicated," said Goncalves, who will remain at the helm of the company. The company would have the capacity to produce 16.5 million tons per year of flat-rolled steel, and 28 million tons per year of iron ore pellets.
Among other things, Cleveland-Cliffs will be adding three integrated steel operations with a combined capacity of 16.2 million tons per year, including ArcelorMittal's Cleveland facility in Ohio, and the Indiana Harbor and Burns Harbor complexes, both in Indiana.
"Furthermore, the seven blast furnaces we are adding to our portfolio expand our options in becoming a [...] future supplier of merchant pig iron to other companies in our space [...] if and when we decide to do so," Goncalves said. Cleveland-Cliffs also will acquire two electric arc furnace mills that will expand its end-market exposure to plate and rail products, he said.
In addition, the acquisition will bring two more iron mining and pelletizing facilities, both in Minnesota, under the Cleveland-Cliffs umbrella.
"Finally, we are adding to our already best-in-class finishing profile with eight facilities that have phenomenal capabilities...which is of utmost importance to expand upon for a strong position in the demanding automotive market," Goncalves said.
Goncalves also said during the conference call that the startup of the company's new hot-briquetted iron plant in Toledo, Ohio, was within weeks of startup. The 1.9 million-ton-per-year facility will supply iron to electric arc furnaces. For more information, see Industrial Info's project report.
ArcelorMittal said it will maintain assets in Canada and Mexico, along with the AM/NS Calvert joint venture with Nippon Steel Corporation (Tokyo, Japan) in Alabama. ArcelorMittal announced plans in August to build a 1.5 million-ton-per-year electric arc furnace at the steel mill. For more information, see Industrial Info's project report.
The deal will allow ArcelorMittal to get rid of about $500 million in net liabilities, including pensions, the company said, adding it intends to redistribute $500 million in cash proceeds to shareholders through a share buyback program.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
